INDIA SENSEX AND NIFTY PERFORMANCE IN 2021

A strong rebound from March 2020 has made India's stock markets expensive again. For example, the Nifty valuation (price-to-income ratio) is trading expensive this year with its 6-year average. "Compared to its own history, domestic bond yields (as measured by equity risk premiums), as well as against global and emerging market equities, Indian equities are no longer cheap, and are at a close level from being the most expensive to credit. And time says . The policy of foreign capital has also taken the markets to new heights. Experts at Quantum Asset Management expect this to continue as lower global interest rates make the markets attractive. The information says "this coupled with the rebound inherent in economic activity is making investors optimistic."

Which Market Will Shine Brighter   

In contrast, China has emerged as the main leader. Not only is it clearly recovered from the Kovid-19 effect, but it is also already posting positive elevations. And despite a higher base this year, many economists expect the Chinese economy to grow at an even faster pace next year. Experts are betting on European markets to recover faster after missing the rally in 2020. "European markets may do better than ever after Brexit resolution and discovery of Kovid vaccines. Emerging markets (including China) may also see an uptick in indices after underperforming in 2020," said head of retail research at HDFC Securities . However, the picture is far from earnings. "Major risks in markets include early end of easy monetary policy, presence of worldwide expanded / recurrent Kovid-19 and difficulties in return to GlobalGrowth," he says                                                    

    

Meanwhile, Indian markets have a tougher road ahead. High stock valuations coupled with a slow economic recovery could provide a reality check to investors’ newfound optimism.