The benchmark indices have been in the grip of the bulls in the last one month on the back of improved global cues, hopes of further policy actions and a good festive season.

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Further, a series of policy changes by the government and the Reserve Bank of India (RBI) helped revive sentiment. Additionally, corporate commentaries in the ongoing 2QFY20 result season also turned marginally better.

Both the Nifty and the Sensex rose around 7.5 percent in the last month, however, midcaps outperformed the benchmarks in this period. Both the BSE Midcap and the Nifty Midcap indices advanced over 8 percent in the last one month.

However, on a year to date basis, midcaps lagged benchmarks. While the BSE Midcap fell 3.5 percent in 2019, the Sensex rose 12 percent during this period.

In the Nifty Midcap 100 index, 45 stocks rose over 10 percent just in the last month. Among stocks, Reliance Power rallied over 100 percent just in the last month, while Reliance Infra surged over 80 percent. JSPL jumped over 55 percent, Edelweiss Financial Services advanced over 40 percent, SPARC added 38 percent and Indiabulls Ventures rose 35 percent.

Among other gainers, JSW Energy, GMR Infra, Pfizer, NBCC, Manappuram Finance, Jubilant FoodWorks, SRF, IGL, LIC Housing and Oil India were also up over 15 percent each.

According to a report by Motilal Oswal, post-September, the market sentiment has revived sharply due to the government and the RBI undertaking several initiatives to arrest growth slowdown. This will, however, take time to work on the ground and reflect in numbers, it added.

"Despite persistent negative new flows on high-frequency indicators, at the moment, in our view, the market is ignoring near-term earnings and growth concerns and focusing on long-term reforms (tax cuts, disinvestment /privatisation, potential cuts in income tax rates/DDT/LTCG, etc.). An improvement in global cues (easing of the US-China trade war, range-bound crude oil prices, monetary easing by the US Fed, US equity markets

at new high) is also aiding sentiment," the domestic brokerage house explained.

It also expects the government to maintain its policy/reform momentum and announce more initiatives in the coming days. Some of the key monitorable as per MOSL from a near-term perspective include: (a) Pick-up in rural consumption, (b) Progress on key stressed asset resolution and IBC cases, and (c) Potential tax changes in Personal Income tax, Dividend Distribution Tax, and Long-term Capital Gains tax.

Their top midcap picks include Indian Hotels, AU Small Finance Bank, Colgate, Crompton Consumer, Ashok Leyland, ABFRL, M&M Financial Services, JK Cement, and Alkem Labs.

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First Published:Nov 8, 2019 5:22 PM IST