New Delhi, June 10 -- The Nifty 50-gold ratio, one of the most reliable long-term indicators of market sentiment, has narrowed further to 1.56, suggesting that the Indian stock market is oversold and equities are deeply undervalued relative to gold.

For those unfamiliar with the metric, the ratio is simple: you take the Nifty 50 index and divide it by the price of 1 gram of gold in India. It acts as a kind of 'value meter' for the Indian economy.

When the ratio is high, equities are considered expensive relative to gold. When it is low, stocks are effectively trading at bargain valuations.

If the ratio jumps above 4, it is generally considered a sign that equities have run too far ahead of gold. On the other hand, when the ratio drops ...