The sharp run-up in the market post the new government has made
investors, especially retail investors, a bit cautious. The bitter taste of the
recent past is not going easily and most retail investors seem to have missed
the bus as they still find it hard to believe in the likely turnaround of the
Indian economy. The rally has, therefore, been mainly triggered and carried by
FIIs’ belief in the Indian economy and the massive amount of cheap money
flowing in due to the comparative attractiveness of India vis-a-vis other
emerging economies. Indian investors with a cost of capital of around 10 per
cent still do not find the market worth investing in.
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