Indian markets are at an all-time high, driven by strong inflows from the FII the past few months. From a macro standpoint, India stands out relative to peer countries, with inflation moderating ,investing activity and growth picking up. Growth hurdles of Indian economy has corrected to a large extent. Infrastructure has been improving consistently, corporate balance sheet strength has improved, and financial system is in a robust state to fund the potential growth. Despite the recent rally, fundamentals point to the possibility of strong earnings growth in medium term. Valuations around the long-term average makes a strong case for reasonable returns as earnings upcycle gains strength. Investors could be better off by staying invested and maintain their equity allocation in line with long term asset allocation plans.
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