In a sweet spot

THE market is witnessing an unprecedented bull run post the BJP coming to power in four of the five states that have gone to polls recently for the simple reason that investors have started presuming a big win for the BJP in the 2019 general elections. Also, by that time, the BJP is likely to cross yet another hurdle of having a clear majority in Rajya Sabha as well giving it the full freedom to go in for bolder and big ticket reforms. If at all the market witnesses any correction, it would be more due to global reasons than domestic ones. The bull run may otherwise continue uninterrupted despite the valuations looking a bit stretched and there being urgency for the earnings to catch up. The BSE Sensex is trading at a PE of 22.3x Fy17 and 18x FY18 earnings. The mid-cap index is currently at 30.2x and small cap index at whopping 64.5x

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