A report by Nuvama says that with current high stock valuations companies are less inclined to give dividends or buy back shares. On the other hand, companies feel reinvesting amid weak growth shall raise supply and have its own risk.
Indian stock indices traded in the red for the second straight session, after snapping a six-session winning streak in the previous session. The latest decline could be attributed to profit booking and concerns among investors over high stock valuations.
There is nothing that seems stopping the current rally in Indian stock indices even as several analysts lately have been pointing to high stock valuations.
Indian stock indices have extended losses for the second straight session, largely due to continued selling by foreign investors on concerns over higher stock valuations.
Some of the major concerns facing the equity markets are tightening monetary policy by various central banks to contain inflation, recessionary fears and high stock valuations.