Indian equity market benchmark indices BSE & Nifty scaled fresh lifetime highs of 64,000 and 19,000 respectively. So far in CY 2023, the indices have gained around 4-5% but in the last 3 months, they have rallied about 12%.
You can listen to Nilesh Shah of Kotak AMC talk about the reasons in detail.
Are the markets expensive?
A look at the Price to Earnings of Nifty shows that the Nifty's valuation is at moderate levels - higher than the past few months but lower than what it was a year ago. The Nifty PE Ratio is the Nifty’s market cap divided by the earnings of the companies, added up. The ratio is used as a valuation relative to the past.
Note: Data source is Nseindia website. Chart shows average historical NIFTY Price-Earnings ratio for the month from 1999 to present. NSE used trailing four quarters standalone earnings from inception till March 2021. Starting April 2021, NSE uses consolidated earnings for the Price-Earnings calculation.
What should we do now?
Similar to our heart beat, it is in the markets' nature to keep going up and down. We should continue to focus on our goals and the key thing is to remain invested in the right assets. Cut the noise and focus on the controllables; the markets always reward this behaviour.
Source: PrimeInvestor, Captialmind, ET Now