As Nifty Heads Toward 18,000, are the Markets Overheated?

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As Nifty Heads Toward 18,000, are the Markets Overheated?

By Puneet Sikka -- Yesterday, India's major stock indices Nifty and BSE Sensex rallied by 1.6%, with Nifty closing at 17,823.

The markets took the news of the US Federal Reserve announcing that it could soon start tapering and may hike interest rates sometime in 2022 in its stride. Investors believe this news was as per expectations, and there was nothing surprising that came out from Fed's announcement. Secondly, China's property developer Evergrande announcement that it resolved the payment crisis for now, also added to the bullish tone.

The momentum could well take Nifty to 18,000 today, but it will also heighten the worries of markets being overheated. The valuations are already at a 16-year high and with Nifty trading at one-year forward PE of 24.4, the worries are justified. Only time will tell where the markets are headed in future.

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  • Sandeep Manchanda @Sandeep Manchanda
    Bulls ka sikka jam gaya. Bears are tired fully. something significant can only change it.
    Like 0
  • Sridhar N Rao @Sridhar N Rao
    No one can predict and the market cares not for anyone’s opinion! As the overall trend is bullish, just keep buying the dips whenever you can!
    Like 3
  • Trilok Agarwal @Trilok Agarwal
    within the timeframe, yes, nifty is overheated and will trap the Bulls some time soon
    Like 2
  • Ajay Uppal @Ajay Uppal
    Like 3

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