CLSA And Goldman Say Indian Stocks May Be Near A Peak
Half out of the 18 important market tops over the last 30 years have occurred during the January-March period, according to CLSA.
As Indian equity benchmarks have more than doubled since their multi-year lows in March, a peak may be nearer, according to CLSA and Goldman Sachs. Both, however, don’t foresee the onset of a bear market.
CLSA’s proprietary bull-bear index, which uses about 20 indicators—like absolute and relative valuations, volatility, market breadth, among others—to quantify various aspects of investor sentiment, rose to a 15-year high a few days ago, suggesting peak bullish sentiment.
“This coinciding with peak valuations of the Nifty on trailing and forward multiples as well as happening during the January-March quarter, make us worry if we’re nearing an important peak on the Nifty,” the brokerage said in a note.
That apart, the first three months of any year have the highest likelihood for a market peak, according to CLSA. Nine of the 18 important market peaks over the last three decades, the brokerage said, have occurred during this period.