India’s stockmarket mania leaves equities vulnerable

India's BSE Sensex stockmarket index has gained 93% since March 2020. But the gains are not justified by the economic fundamentals.

Nirmala Sitharaman, India's finance minister
Finance minister Nirmala Sitharaman is turning on the fiscal taps
(Image credit: © T. Narayan/Bloomberg via Getty Images)

“Stockmarket mania” is in full flower in India, says Mike Bird in The Wall Street Journal. The BSE Sensex stock index has gained 93% since March 2020. Last month it closed above 50,000 points for the first time.

The BSE Sensex’s gains have matched those of America’s S&P 500 since early last year, notes Bird. This rally is not justified by the economic fundamentals: GDP crashed by 24% in the second quarter of last year. Poverty has soared. In the country’s banking sector, long the economy’s Achilles’ heel, gross non-performing assets are set to rocket as the pandemic chokes off activity. Indian equities are priced for perfection, leaving them vulnerable to bad news ahead.

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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.