The market continues to be driven by liquidity; the only difference is that the money is coming in from tier II and III cities, said Ajay Srivastava, managing director at Dimensions Consulting.

He said this liquidity will dry up only if there are other alternative investment options. “These could be your own business or inter corporate deposit (ICD) market or real estate. If there is nothing happening in those sectors, then quite obviously, the only way out is just keep pumping money in equities,” he told BloombergQuint over the phone.

He said the steady stream of flows at every level is lowering the risk but at the same time making investors complacent. “By and large there is consensus that valuations are stretched,” he said.