Why investors should beware of India’s surging stockmarket

The BSE Sensex benchmark index has soared by 90% since March, largely driven by foreign investors. But India's bull market is very vulnerable.

Indian farmers protest
Farmers are furious about agricultural liberalisation
(Image credit: © Getty Images)

Those who complain that Western stockmarkets have become disconnected from the economy should take a look at India. Prime Minister Narendra Modi ordered a very strict lockdown last spring. GDP subsequently crashed by 23.9% in the first quarter and the World Bank thinks output will contract by 9.6% in the 2020-2021 fiscal year (to 1 April 2021).

Yet the stockmarket has continued to make all-time highs. The BSE Sensex benchmark has soared by 90% since last year’s March lows and is up by 20% on pre-pandemic levels.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.