The Indian stock market in FY21 posted its best financial year performance in a decade, shrugging off the economic adversities caused by Covid-19. The Nifty returned almost 71% in the financial year ended March 31 — the best since FY10 — in a record-breaking rally, though it raised questions whether the market has run up too fast? Foreigners propelled the upmove, pumping Rs 2,73,603 crore during the financial year—the highest ever inflows —aided by dollar’s weakness on account of the gigantic stimuli by the US government and the Federal Reserve. Domestic retail investors were not left behind. They pulled money out of mutual funds and took control of their own investments. Valuations are rich at current levels but investors are pinning hopes on a sharp rebound in FY22 earnings to help markets justify these levels. “Economies would rebound smartly in FY22, but markets have already discounted this, and valuations are high. But this is unlikely to deter the bulls in the short run,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.81806120