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The Nifty touched a fresh high of 15,916, ending June'21, 1 per cent higher month on month at 15,722. The Nifty is up 12.4 per cent in calendar year 2021, year to date.

The rally was on the back of strong FII inflows, receding of the second Covid wave boosting confidence in an economic recovery, and an in line earnings season.

FIIs continued their buying streak in June'21 at 1.5 billion. DIIs saw inflows for the fourth consecutive month at $1 billion.

Midcaps/smallcaps outperformed largecaps by 3.7per cent/4.1 per cent in June'21. In the last 12 months, midcaps have risen 83 per cent v/s a rise of 53 per cent for the Nifty. In the last five years, midcaps have outperformed by 5 per cent. The Nifty Midcap100 P/E now trades at par with Nifty-50.

As per Motilal Oswal Institutional Equities, Corporate India displayed tremendous resilience in FY21, with the Nifty ending the year with a healthy (15 per cent) earnings growth, which was unthinkable a year ago.

The second Covid wave in Apr-May'21 has soured sentiments and impacted economic activity. Since restrictions this time around was localized and less stringent v/s the lockdown in CY20, we expect the impact in 1QFY22 to be contained.

"We expect earnings momentum to accelerate in FY22 as the pace of vaccinations picks up and the economy opens up further. BFSI and commodities are expected to drive FY22E earnings. The market has been strong and largely looked through the second Covid wave on the back of strong liquidity and robust participation from non-institutional investors", the report said.

In the last 12 months, MSCI India (+52 per cent) has outperformed MSCI EM (+38 per cent). In the last 10 years, MSCI India has outperformed MSCI EM by 127 per cent. In P/E terms, MSCI India is trading at 88 per cent premium to MSCI EM, above its historical average of 57 per cent.

Among sectors, Technology (+8 per cent), PSU Banks (+4 per cent), Consumer (+2 per cent), Real Estate (+2 per cent), and Media (+2 per cent) were the top performers in Jun'21.

Tata Consumer (+14 per cent), Infosys (+13 per cent), Titan (+9 per cent), Tech Mahindra (+7 per cent), and Bajaj Finance (+7 per cent) were the top performers. Adani Ports (-9 per cent), ITC (-6 per cent), Kotak Mahindra Bank (-6 per cent), Hindalco (-6 per cent), and ICICI Bank (-5 per cent) were the top laggards.