Stock market rally hinges on corporate earnings

The gauge dropped 0.5% to 29,642.89 at 9:58 am in Mumbai

The fate of India's world-beating stock-market rally hinges on a routine event: earnings season.

Equities are trading near record levels in Mumbai, bolstered by bets that a state election victory will embolden Prime Minister Narendra Modi to push ahead with his reform agenda. Valuations rose to the highest level since 2010 at the end of March and the S&P BSE Sensex index is the top-performing gauge this year among the world's 10 biggest stock markets.

The gap between share prices and company profits has widened since 2014 on expectations economic growth will filter into bottom lines. That hasn't happened consistently, while India's