Stocks could yield healthy returns over 3 years if earnings growth revives

Those who have become heavily overweight on equities should do some profit booking. But cashing out altogether will be a mistake

The Nifty 50 index touched the 13,000 level this week. Since its March 23 low, this benchmark is up 70.7 per cent. After such a steep run-up, many investors are worried today that a correction could take away the gains they have made in the markets so far this year.

High global liquidity

A few fundamental factors are responsible for the sharp turnaround in the equity markets. Central banks across the world have kept interest rates low and liquidity levels high. This has supported the growth outlook for companies and sectors and helped sustain equity valuations.

Foreign institutional investor (FII)