Current scenario for equity market in India: Sensex trailing twelve-month (TTM) PE of 23.47, nearly 600 basis points higher than the 10-year average PE of 17.50.
However, the valuation right now is relatively cheaper than what it has been in the last 30 peaks. The last time Sensex was cheaper than now despite being at an all-time high level, was in June 2017.
Currently Nifty 50 index is also very close to all-time high levels. Its TTM valuation at 23.27 PE is also over 630 basis higher than the 10-year average PE. On a 1-year forward basis, the index trades at 20.61 times its earnings.
Future perspective for Indian equity market: India’s stock markets are the most expensive in Asia and emerging markets currently. Compared to the Asia-Pacific region, it trades at an elevated PE premium of about 80 percent but further upsides in the index can be seen by relatively higher earnings growth & fall in crude oil prices to a 10-month low.
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