yes the budget is here but that's where the good news ends. Markets appear overvalued at trailing P/E's of well over 22. Have a look at the data below:
2008 GDP - 7.5%, Dollar/Rupee - 42, Stock market Peak January - 6350, P/E -24, 3 month return from Jan 08 < -30%
2015 GDP - 5.5%, Dollar/Rupee - 62, Stock market Peak till date - 9119, P/E -24, It remains to be seen how much of a decline will occur, as of now -6.0%.
So clearly the stock market has advanced on weak fundamentals and rapidly deteriorating macros and no matter how great the budget, a substantial sell off beckons.
2008 GDP - 7.5%, Dollar/Rupee - 42, Stock market Peak January - 6350, P/E -24, 3 month return from Jan 08 < -30%
2015 GDP - 5.5%, Dollar/Rupee - 62, Stock market Peak till date - 9119, P/E -24, It remains to be seen how much of a decline will occur, as of now -6.0%.
So clearly the stock market has advanced on weak fundamentals and rapidly deteriorating macros and no matter how great the budget, a substantial sell off beckons.
Do you think we might see Nifty/Sensex being rerated to late 19ish multiples? That itself would lead to a further fall of over 1,500 points on the Sensex.
ReplyDeleteyes good point, even after the recent sell off the market is definitely not cheap, am thinking we get to a 15 p/e at some point this year after an oversold bounce.
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