Prepare yourself for a Diwali bonanza from the markets this year if foreign institutional investors (FIIs) continue with their festive mood and keep pumping in money.
On Tuesday, thanks to the FIIs, the BSE Sensex closed above 20,000 and the NSE Nifty above 6,000, the first time since January 2008.
FIIs have already pumped in a total of Rs 16,037 crore ($3.46 billion) in 14 trading sessions of September. If the trend continues and with seven trading sessions still to go, it may even get past the all-time high FII inflow of Rs 23,872 crore that it registered in July 2007.
Based on the price to earnings multiple, the Indian market today is more expensive than the ones in the US, France or even China. So, while the Sensex may continue to race towards 21,000, experts feel the rally has already defied fundamentals. So, retail investors should exercise caution.