The equity market in India reached a new peak last week with the benchmark Sensex reaching a record high of 64,768 on yesterday Friday, June 30th. It ended the day at 64,718. The index has been a tremendous run since the troughs of the Covid-19 panic in early 2020. Since then it has crossed it previous highs and continues to go higher. It remains to be seen where it ends at the end of this year.
Sensex Year-to-Date Return:
Sensex 5-Year Return:
Sensex Long-term Return:
Source: Google Finance
The index reached 50,000 in May 2021 and in Q2 this year it shot up 9.71%. Soaring stock prices have led valuations extremely high. The following chart from a recent article at Reuters shows the valuations of Sensex and its cousin Nifty relative to a few Asian peers:
Click to enlarge
Source: Indian shares hit record highs; Nifty closes a notch below 19,000, Reuters
As an emerging market caution is warranted for any new investments.
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