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As per the table, the market does not appear to be in an expensive zone on a 1- year forward basis, indicating potential upside even without further P/E expansion. However, we expect some degree of P/E expansion, which could lead to extreme volatility in either direction.

* In Diwali 2023, the Nifty stood at around 19,400 and has now reached 24,472, delivering approximately 28% returns, with the majority of the gains coming in the later part of the period. The top-performing sectors include Nifty Pharma with returns of about 38%, Nifty Auto at 35%, and Nifty Realty at 33%.

* We expect sectors that underperformed compared to Nifty over the past year to catch up and deliver stronger returns moving forward. These sectors include Nifty PSU Bank, Nifty Financial Services, Nifty Bank, and Nifty Metal.

* While geopolitical events initially impacted the markets, they didn't escalate globally, and markets ultimately moved past them. Crude oil has been a key indicator reflecting this resilience among market participants.

* Another major macro factor is the softening of inflation, which has prompted central banks to consider rate cuts. The first cut occurred in September, with more expected in November.

* Historically, rate cuts tend to benefit commodities, and we foresee substantial upside in metal stocks in the near future, further supported by China's efforts to inject trillions of dollars to stimulate its economy.

* Additionally, midcap technology stocks are poised to benefit from rate cuts as their valuations have become more attractive, likely drawing investor interest.

Given this rationale, we have selected 10 top picks that we expect to perform well over the next year.

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