Behind the stocks rally seen on Dalal Street since late April lurks a nagging worry about growth prospects of the economy, which puts the market at risk of a sudden U-turn.
A top Nomura analyst on Tuesday flagged this worry, saying that the equity risk premium remains high, which shows that investors are a worried lot.
“India needs a big push from the government to revive the COVID-19-hit economy,” say experts.
The government needs to spend on infrastructure in a big way to revive growth as corporates are not investing at this point in time.
This came a day after Moody's Investors Service downgraded India’s sovereign credit rating for the first time in more than two decades. The latest official data showed the economy grew at 4.2 percent in FY20, the slowest rate in 11 years.
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