Share markets in India continued their upward climb in afternoon trade with both Sensex and Nifty closing a fresh all-time high. At the closing bell, the BSE Sensex closed higher by 355 points. While, the NSE Nifty finished higher by 97 points. Meanwhile, the S&P BSE Midcap Index ended up by 0.7% while the S&P BSE Small Cap Index ended up by 0.4%.

Barring FMCG stocks, all sectoral indices finished the day in green with information technology sector and PSU sector witnessing maximum buying interest.

Meanwhile, trading was disrupted at India’s National Stock Exchange on Monday morning, after price quotations for individual stocks and indices failed to update.

After a snag of about three hours, the exchange resumed trading, at 12:30 PM.

The markets are touching record highs every day. It makes sense to sit back and evaluate if the fundamentals are in place for such heady growth. When one looks at corporate earnings over the past 5 years, it paints a different picture.

Earnings Yet to Catch Up with Valuations

While valuation has reached dizzy heights, earnings are yet to catch up. Investors are hoping that earnings will eventually catch up with valuations. Even the slowdown on the economy due to the notebandi impact has been ignored.

With money from retail investors coming into the market at a steady pace, the general assumption amongst investors is that growth will eventually come and justify the premium valuations they’ve given to the markets. Perhaps investors are getting ahead of themselves.

Asian equity markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.76% and the Hang Seng rose 0.63%. The Shanghai Composite lost 0.17%. European markets are higher today with shares in Germany leading the region. The DAX is up 0.64% while France’s CAC 40 is up 0.31% and London’s FTSE 100 is up 0.30%.

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