Modi risks wealth erosion as savers chase India stock rally

Equity mutual funds seeing record number of investors sign up

Indians pouring record amounts of their savings into a stock-market rally risk getting burned.

Earnings per share at companies in the NSE Nifty 50 Index have stagnated since the run up to the 2014 elections, which triggered a surge in equity prices. The index has risen 50 per cent over the same period. Bridging the gap won't be easy after already-slowing economic growth was slugged by Prime Minister Narendra Modi’s demonetisation drive late last year and the disruptive roll-out of the goods and services tax this July.

The cash ban funnelled savings into banks, forcing them to lower deposit rates given the