Indian share markets witnessed selling pressure in the final hour of trade. At the closing bell, the BSE Sensex closed lower by 145 points and the NSE Nifty finished lower by 39 points. The S&P BSE Mid Cap finished up by 0.2% while S&P BSE Small Cap too finished up by 0.2%.

Losses were largely seen in PSU stocks, bank stocks and pharma stocks.

Asian stock markets finished mixed as of the most recent closing prices. The Hang Seng gained 2.27% and the Shanghai Composite rose 0.45%. The Nikkei 225 lost 0.43%. European markets are higher today with shares in Germany leading the region. The DAX is up 0.72% while London’s FTSE 100 is up 0.65% and France’s CAC 40 is up 0.59%.

Rupee was trading at Rs 64.12 against the US$ in the afternoon session. Oil prices were trading at US$ 58.78 at the time of writing.

The Market cap to GDP ratio for Indian companies too is close to dangerously high levels. While this is still some way off the peak of FY-08, when it had once reached close to 150, it’s relatively high.

FY17 saw this ratio reach close to 80. It is also expected to increase further given the moderate growth expectations in India’s GDP for FY18. Warren Buffett once considered this as one of the best valuation metrics to gauge the markets.

Past history shows some correlation between the ratio and the share market. 2008 saw Sensex decline by 38%, when this ratio crossed the 100 mark. Also, the market has bounced back sharply when this ratio was low.

The Warren Buffett Indicator Suggests Indian Equity Market Is Overvalued

The basic assumption in this ratio is that whenever the GDP of the country grows, the market performance will reflect it. Also, when stocks do well, it can be extrapolated to assume the Indian economy is doing well.

In news from banking sector, Punjab National Bank (PNB) share price is in focus today after the bank said that it had detected “fraudulent and unauthorized” transactions worth about US$ 1.8 billion at one of its branches in Mumbai.