Brokerages turn cautious on markets amid slowing growth, rich valuation

Since the cut in corporation tax, the S&P BSE Sensex and Nifty 50 have gained 12 per cent and 11 per cent

The slump in key economic indicators and a sharp liquidity-driven rally since the government cut corporation tax on September 20, 2019 has made brokerages cautious on markets, who now indicate a limited upside for the indices in the short-to-medium term.

Since the cut in corporation tax, foreign portfolio investors (FPIs) have pumped in Rs 39,930 crore ($5.6 billion) till November 14 in equites, while mutual funds have invested a nearly Rs 6,000 crore, data show. The S&P BSE Sensex and Nifty 50 have gained 12 per cent and 11 per cent, respectively since then.

“Belying our expectations of a recovery