The Indian stock market appears to be in a favorable phase, where the stars seem aligned in its favor. With the price-to-book ratio for the Sensex stocks as a whole less than 3.5 and the PE ratio hovering in the mid-20s, stock prices are close to frothy, but not in bubble territory yet. This optimism is bolstered by the ruling Bharatiya Janata Party’s recent electoral victories in key north Indian states, suggesting possible policy continuity and an easy win in 2024. Additionally, India’s economy has shown unexpected growth, prompting the Reserve Bank of India to revise its growth projections upward.
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