India's equity indices are up almost 25 per cent in 2014 so far, including the nearly 10 per cent gain since Narendra Modi took charge as prime minister in May this year.
This is remarkable especially since it comes on top of a nine per cent rise in 2013 and a much higher 25.7 per cent rise in 2012. The problem is that fundamentals are yet to catch up.
This rally is largely being driven by hopes that the Modi government will drive economic growth higher and, thus, increase earnings growth for companies.
Thus, questions about the sustainability of this market are valid - given geopolitical risks, as well as the uncertainty over liquidity withdrawal and possible rate tightening by the United States Federal Reserve in 2015.
Text: Business Standard
Image courtesy: AP