© Reuters.
Goldman Sachs Group Inc (NYSE:). analysts have advised investors to approach Indian equities with caution due to a range of global macroeconomic risks. The warning, made on Thursday, comes in the wake of high oil prices, increasing U.S. interest rates, a robust dollar, and elevated valuations following a sharp rally since March.
The analysts recommend this conservative stance for the next three to six months. This advice is influenced by the actions of overseas investors who sold $2.3 billion worth of Indian stocks in September, following six months of inflows.
Adding to the economic uncertainty is India’s upcoming national elections, with Prime Minister Narendra Modi seeking a third term. The electoral outcome could have substantial impacts on the country’s economic landscape.
Analysts highlighted that India’s NSE Nifty 50 Index is currently trading at 18.2 times its one-year forward earnings. This makes it the most expensive national benchmark among major Asian markets, further justifying their recommendation for caution in investing in Indian equities.
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