Despite slowdown in the economy and low GDP growth numbers, Sensex 30 continued to rally in the month of Nov. A deeper look however, tells a different story. The market rally was limited to only a few large stocks like Reliance Industries, HDFC etc. Broader markets did not participate in the rally. As a result most of the mutual funds (which are more broad-based) did not give good returns. This kind of divergence is happening since last 2 years. As a result of this divergence, select large caps look severely over-valued. However, most of the medium and smaller sized companies look under-valued.