Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Mark-to-market/  Indian market valuations fall below long-term average
BackBack

Indian market valuations fall below long-term average

The good news for India is that when market valuations are already below the LPA, they will, once the panic settles, regain their attraction for investors

Ajay Negi/MintPremium
Ajay Negi/Mint

The underperformance by the Indian equity markets in recent months has meant that domestic markets are trading at valuations below their long-period average (LPA) of 10 years. As the chart shows, developed economies such as the UK and the US trade at a significant premium. In fact, MSCI EM (emerging markets) and China, too, are trading at a premium. Prices mentioned in the chart are as on 30 April and the Indian market has dipped substantially since then, which means valuations have come off even more.

“There is a reallocation of funds to markets that are already performing well such as Brazil, Russia and China," says Hitesh Agarwal, head of research at Reliance Securities. “Moreover, considering Indian markets had already gone up substantially after the change of government, some kind of profit-booking is bound to happen."

The good news for India is that when market valuations are already below LPA, they will, once the panic settles, regain their attraction for investors.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Pallavi Pengonda
Pallavi is a deputy editor at Mint and heads the Mark to Market team. This column covers wide-ranging topics related to the stock markets, offering an in-depth analysis of financial reports of companies. She writes and edits across verticals, covering the breadth of the Indian stock market. Pallavi has done her master of management studies, specializing in finance.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 07 May 2015, 04:07 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App