“The sharp rally since end-March, expensive valuations and global macro risks warrant a tactically conservative stance over the next three to six months,” analysts including Sunil Koul and Amorita Goel wrote in a note.
The polls are likely to have a bearing on economic policy and reforms at a time the world’s fastest-growing major economy is increasingly seen as an alternative to China. Having climbed more than 15% from a March low, India’s NSE Nifty 50 Index is trading at 18.2 times its one-year forward earnings, making it the most expensive national benchmark among major Asian markets, according to data compiled by Bloomberg. The Nifty Midcap 100 Index has risen 37% in the period.