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Domestic mutual funds (MFs) have been net buyers for 26 consecutive trading sessions, one of the longest unbroken buying sprees, even as the markets trade at lifetime high levels. Since June 7, equity funds have poured in Rs 12,435 crore, at a daily average of nearly Rs 500 crore. During the same period, foreign institutional investors (FIIs) have invested Rs 6,565 crore in Indian stocks.
The strong portfolio flows have come at a time when the domestic markets are above their long-term trading averages, potentially creating a valuation bubble.
The Sensex now trades at 20 times its estimated one-year forward earnings, the
