With India’s market capitalization to GDP ratio reaching 1.2, prices are becoming inflated
According to V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, values are being strained as India’s market capitalization approaches $4 trillion and its market cap GDP ratio rises to 1.2. However, he noted that in the near term, the market is probably going to outpace fundamentals.
The favorable local and international cues have contributed to the market’s evident bullish turnabout. A noteworthy development in the market is the return of Bank Nifty. A strong trend that has seen FIIs turn bullish for five straight days and DIIs purchase aggressively might soon push the Nifty over the historic Nifty high of 2022. According to him, the rally’s leader is probably banking with help from IT.
Positive news from the US market, where GDP is robust and inflation is on the decline, is providing supporting global indications. India’s Q2 GDP figures, which are anticipated on Thursday, will exceed projections. A rally to record highs may occur shortly, he added, if these strong fundamentals are bolstered by Thursday’s exit poll results matching market forecasts.
On Thursday, the BSE Sensex is down 110 points at 66,791 points. ICICI Bank is down 1% while Tata Motors is down more than 1%.
