InvestorQ : Now that markets are at record levels, is it ok or do I need to be worried about valuations?
Dilmini Mercia made post

Now that markets are at record levels, is it ok or do I need to be worried about valuations?

Answer
image
Dawn Cherian answered.
4 months ago
Follow

Here is what you need to know about the stock market levels and the valuations at this point of time.

· Firstly, the election of Joe Biden to the POTUS office has surely done wonders to world markets and India has been no exception.

· Despite larger COVID concerns, Indian market capitalization touched a new peak of Rs.13 trillion. This is the highest market in history in rupee terms.

· More interesting is the value accretion in Indian markets. Indian markets gained $177 billion since the beginning of October to scale the new peak in rupee terms.

· However, this is a global liquidity rally and also a risk-on rally. This is not a rally that is just confined to India. Let us look at some interesting numbers.

· World markets gained $7 trillion in market cap since the beginning of the month and India accounted for just 2.5% of the global market cap accretion, which is fair.

· This is approximately the weightage that India has in the global stakes. The big gainers in the process have been the US and the China markets.

· What is more relevant is that in this entire rally, Reliance has not been a very enthusiastic participant but it is the financials that are propping the markets higher

· The story now is looking very much like a risk-on story where the investors are hoping that Joe Biden would make EM investing attractive once again.

3 Views