More pain in store? Reality check for stock markets after a dream run

After a relentless run, stocks are set for a reality check as investors evaluate how much the markets can be devoid of economic fundamentals.

On Friday, equities posted their biggest weekly drop since May, with the benchmark Sensex and Nifty dropping nearly 3 per cent amid a sharp sell-off in technology stocks in the US. Both foreign as well as domestic investors were seen pulling back their investments amid doubts over the pace of economic recovery. The selling came in the week when the data showed India’s gross domestic product had contracted 23.9 per cent in the June quarter —