'Frothy' assets spark concerns as cash floods Indian markets

From officials of India’s central bank and the market regulator to fund managers, people are fretting over elevated asset prices.

The nation’s equities and bonds have rallied even as economic growth sags to its weakest since 2014, and earnings remain stubbornly weak. The reason: A surge in local flows after last year's cash ban and buoyant global markets.

This divergence is spiking valuations and inciting caution among authorities and strategists. Michael Patra, a member of the Reserve Bank of India’s rate-setting panel, described the conditions as “frothy and bubbly” in the minutes of last month’s meeting. Gurumoorthy Mahalingam, a board