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The fear of flying at Mount 50K

Investors outside the Bombay Stock Exchange. Valuations are uncomfortably high; stocks have never been so expensive except maybe during the Harshad Mehta fuelled bull run in the early 1990s.

  • Flush with liquidity, the stock markets are at a dreamlike high. But the worries are also mounting
  • Many feel the gains have come too fast. With scores of new investors entering the bull market late, and with the cream of the rally behind, further gains are not going to be easy

For the past few days, the Sensex has been flirting with the landmark figure of 50,000. Things have reached such a pass that crossing the magical mark seems to be a matter of course. The Indian stock market’s rise has already been unbelievable, defying all odds.

Just 10 months ago, the Sensex hit a low of 25,638 points. Despite businesses being shuttered and profits being wiped out, stock prices have been in an almost-daily price sprint since then. Small investors who may have lost heavily in the February-March crash have recouped their losses, and then some. The 2020 revival recaptured the peak in less than nine months. Earlier recoveries took longer. After the January 2008 peak, post the Lehman crash, the market took about 70 months to regain its highs.

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