Reserve Bank of India warns that the current rally in the stock market is dangerous

New Delhi, May 28, 2021, Friday

The economy is being hit amid sanctions imposed by the country's corona transition and the stock market is booming.

Given the widening gap between the real economy and financial asset prices, the Reserve Bank of India is now worried that the rally in the stock market will end soon. The bank mentioned this while releasing its annual report on Thursday.

The bank warned that the current rally in the stock market is risky, with GDP expected to be lower than expected in the year 2020-21, although the rally in the stock market is pointing to risk.

According to the bank, the share price is currently reaching record levels. The Sensex had crossed 50,000 on January 21 and reached 52,154 points on February 15. This level is 100 per cent higher than the decline the country saw during the lockdown last year. The Sensex has risen by a total of 68 per cent in 2020-21. On the other hand, the country's GDP is projected to decline by 8 per cent in 2020-21.