India’s market capitalization to gross domestic product (GDP) surged to a decadal-high of 103.47% as of 31 March, signalling expensive valuation of equities but most likely pricing in a recovery in the near future. The high valuation highlights the sharp covid-induced contraction of the Indian economy in fiscal 2021 at a time when the stock markets made robust gains. This led to a surge in India’s equity valuations as measured by mcap to GDP.
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