 "Brokers trade at their computer terminals at a stock brokerage firm in Mumbai. Photo: Reuters")
While the Street has welcomed last week's election results with a 500 point up-move on the Sensex, brokerages are guarded on further gains.
This is due to an adverse interest rate cycle, higher bond yields in developed markets, impacting the flow of liquidity in general, and expensive valuations. Bank of America Merrill Lynch (BofaML) analysts say the domestic equity market, trading at above-average multiples, is susceptible to global risks. And, earnings are expected to see the effects of demonetisation in the March quarter. The brokerage is cautious on the near term.
Gautam Duggad and Nikhil Gupta of Motilal Oswal Securities are cautiously
