4 reasons why BofA-ML is cautious on Indian markets

The index is just 4% away from its all-time high of 30,024, which it hit on March 04, 2015

Sensex may have risen nearly 9% year-to-date, global brokerage Bank of America-Merrill Lynch sees the index to fall in near-term from the current levels. The recent sharp rally has turned the valuations rich, while the headwinds on earnings front owing to residual overhang of demonetisation and deferral of GST implementation to July from April may keep the investors on edge, BofA-ML said. 

“While we expect longer term business cycle to improve in next 2-3 years, we see near-term returns capped from hereon due to 1) possible near-term reversal of global wave, 2) market’s under-appreciation of residual impact of demonetisation, 3)