Mumbai: The Nifty 50 opened at 10,010.55 points, breaking the 10,000 mark for the first time on Tuesday, but retreated within minutes. The index, in fact, closed in the red, off .02% from Monday’s close, at 9,964.55,

In Indian markets, there is a saying that when the paanwala (or betel leaf seller) starts giving you stock tips, it’s time to sell. After a 47% rise over the last 17 months, are investors getting wary of the new highs?

There are reasons to believe that the run can continue: a high earnings yield for equities compared to fixed income, continued preference towards India by foreign fund managers lured by growth prospects and better economic management will ensure that money will continue flowing into equities.

Yet, investors might well take a pause to reassess the situation. The Nifty is currently trading at 17.99 times its expected earnings for the year ahead. Simply put, earnings expectations are still not matching the euphoria among investors.

To be sure, this price-earnings multiple is still some way off the tops seen in January 2008 towards the end of the pre-global financial crisis bull run. However, it is very close to the tops seen in the previous rallies of 2010 and 2015, points at which the markets started consolidating.

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