Barely the bottom

Indian stocks have now fallen for four straight weeks and appear to be cheap by some measures. But are they fully pricing in all the negatives?

The concerns about the euro zone crisis, inflation at home, and the government’s ability to rein in the fiscal and current account deficits remain unabated. Risk aversion among investors continues as the fall in global stock markets shows. Bottom fishing is always a hazardous occupation. But note that on previous occasions, Indian stocks had fallen to even deeper levels when measured by metrics such as the price-earnings multiple or the price-book value ratio.

Also See | Barely the bottom (PDF)

Graphic by Sandeep Bhatnagar/Mint