Traditionally, most PSUs have been cash-rich, which added to their value. However, the government has been tapping regularly into their cash resources to boost revenue for the exchequer

The surge in oil prices has also affected the rupee, which hit a 6-week low of 70.25 on Friday against the dollar.

With the frontline Indian benchmark indices trading near all-time highs ahead of the general elections that begin later this week, Marc Faber, Editor and Publisher of "The Gloom, Boom & Doom Report" tells Puneet Wadhwa that the Indian stock market is relatively expensive, especially the index (large-cap) stocks.

There will be pressure on the fiscal situation, especially at a time when the monsoon can also disappoint. More populist expenditure is on cards if the mandate is a hung Parliament or a coalition government.

Even though stocks may remain volatile in the run-up to the polls, as political parties stitch up alliances, the long-term trajectory for the markets remains bullish.

'The probability of another negative year in 2019 is low.'

Analysts caution a non-BJP government is not an impossible scenario. In case of a Modi-led coalition, they advise investors to focus on discretionary consumption, select private banks and financials, RIL, housing, and IT.

The polls are being viewed as a run-up to the general elections scheduled for May 2019 and will test the popularity of the government and its policies amid rising crude oil prices

Even as rising crude oil prices, trade war fears and a sliding rupee cast a shadow on market sentiment, Nischal Maheshwari, chief executive officer for institutional equities and advisory at Centrum Broking, tells Puneet Wadhwa that in the next one year, the outcome of the 2019 general election is a bigger challenge for the market.

The recent three-bank merger seems to be grossly negative for Vijaya Bank and Bank of Baroda in the short term, as the negative net worth of Dena Bank will have to be absorbed by the merged entity

Stretched valuations and slowdown in DII flows are some of the reasons why Goldman Sachs cut its India rating to 'market-weight'

Mark Mobius, co-founder, Mobius Capital Partners, tells Puneet Wadhwa that investors should concentrate more on "value" rather than momentum, and on good small- and medium-sized companies rather than large-caps.

High networth individuals selling stocks to buy real estate is among the key risks for the Indian markets.

Analysts attribute this outperformance to the government's proactive economic reform measures

Rising oil prices, sharp slowdown in mutual fund inflows and steep valuations remain the key risks for Indian investors going ahead.

'The economy needs to deliver the expected 7.5% growth for the markets to deliver better than single digit returns.' 'Any disappointment in growth can see the markets correcting downwards.'

Swati Kulkarni, executive vice-president and fund manager - equities at UTI Mutual Fund tells Puneet Wadhwa that though mid-and small-cap companies are trading at a higher valuation as compared to large-cap peers, one can still find value in select pockets.

The Karnataka election is being seen as the semi-final to the 2019 general elections and appears to be heading towards a close fight

The thrust, they feel, remains on design thinking, AI and digital besides enhanced focus on investing in selling and marketing efforts, expanding local talent base and re-skilling staff

The 'Indian story' will be badly damaged if the Modi government is not re-elected, argues investment banker Christopher Wood.