High valuations a concern for ongoing mkt rally
Investors need to be cautious as negative cues can trigger sharp correction to ongoing rally: Analysts
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New Delhi Risk in the stock market is high due to rich valuations and some presently unknown negative developments can trigger a sharp correction, analysts have cautioned.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the ongoing rally in the market has made valuations very rich. Nifty is trading at above 20 times estimated FY 24 earnings. This is higher than the historical average.
“Momentum can take the market higher; but at high valuations risk is high. Some presently unknown negative developments can trigger a sharp correction. So, even while remaining invested in the market, investors have to be cautious,” he said.
