At a time when Indian equity markets are escalating to new record highs, the Reserve Bank of India has warned of a possible bubble.
In its annual report, the central bank has said that the sharp rally in domestic equity markets despite an estimated 8% contraction in FY21 GDP poses the risk of a bubble.
The RBI noted that the benchmark index Sensex crossed the 50,000-mark on January 21, 2021 to touch a peak of 52,154 on February 15, 2021. This represents a 100% increase from the slump just before the beginning of the nationwide lockdown in 2020 and a 68% increase over the year 2020-21.
Nifty touched an all-time high of 15,455 in the morning session on Friday.