High valuations in IndiaPrime Minister Narendra Modi's third consecutive victory was widely expected, but we saw a much tighter margin of victory than the exuberant exit polls suggested. The market pulled back substantially in response, but subsequently surged over the week, adding to volatile conditions. Retail money has been investing at record levels and, in our view, the market is vulnerable to any disappointment, perceived or otherwise. This development, we think, signals excessively high valuations and overexuberance. This latter point had deeply worried the market, given the strong anti-capitalist tone in some of the new president’s policy proposals.

Source: Economic Times July 04, 2024 15:18 UTC