What do you make of markets’ recent steep decline?
Over the last 12 months, markets ran ahead of themselves. There is excessive excitement about the stock market and about small and mid caps. The fair value for Sensex at the end of this fiscal is around the 30,000 mark. Sensex is over-valued by 10-15%, small and midcaps are over-valued by 30-40%. When exactly the correction will happen, I don’t know. The bond market is sending us warning signals.
