The Sensex and Nifty have touched record highs amid strong inflows from foreign investors. The Sensex hit the psychological level of 30,000 for the second time in history on Wednesday. But stock market expert Sanjiv Bhasin, executive vice president - markets & corporate affairs at India Infoline, says markets could be headed for a correction soon. "Markets are at new highs in uncharted territories. Markets have climbed all walls of worries from demonetisation to Brexit to Trump victory. Now definitely markets are looking extremely frothy as best of the results may have played out," says Mr Bhasin.
The current leg of rally in the Indian markets has been triggered after the BJP swept to power in Uttar Pradesh, further boosting hopes of economic reforms at an accelerated pace. The rupee has also strengthened against the US dollar swinging to below 65, its highest level in nearly 18 months.
Mr Bhasin says Nifty can fall by as much as 500 points to below 8,700 levels.
"Our call is that market is near very extreme levels and it is time to raise cash. The US markets are showing a lot of fatigue and we are also extremely overbought and correction is definitely on the cards," adds Mr Bhasin.
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