As the Indian stock markets continue to suffer majorly thanks to a significant decline in the value of indices, another bad news has emerged from the corners of world finance.
India Drops to Third In P/E Rating
As per the latest reports, India’s ranking has further dropped in the Global P/E ranking. Currently, India stands third, having been overtaken by the small island nation of New Zealand.
Here, a P/E ratio/rating or Price to Earnings Ratio is one of the most widely used fiscal mechanisms to gauge an entity. This is used by analysts and investors across the world. The P/E ratio signifies the amount of money an investor is willing to invest in a single share of a company for Re. 1 of its earnings.
Here, a higher rating could indicate a higher optimism amongst investors towards the prospects of investing in the said entity, in this case, the economy of the country.
The overall rating for India stood at 24.83. India held the top position in October before losing it to the United States later in the month.
The pack is now led by the United States, which has a total rating of 27.76. This is followed by New Zealand with 26.62, who overtook India.
India’s P/E Rating
Indian Indices Drop To New Lows
Considering the last 5 years, the average P/E rating has been deemed as ‘Overvalued’. In the 10-year period of evaluation, the rating has been deemed as ‘Expensive.’ In addition, the 20-year consideration, the rating once again stood at ‘Expensive’.
Here, P/E Ratio is calculated on the INDA Etf, whose benchmark is the India Stock Market.
Investors are now looking for better avenues, as they are finding the Indian markets ‘expensive’.
Now, as we look at the Indian indices, it is the story of a major decline. The benchmark indices were trading in red in the intraday trading session on Thursday, November 14. In addition, over the past 5 trading sessions, the BSE Sensex dipped in value by 2.50 per cent. The NSE Nifty also saw a dip in value of a cumulative 2.61 per cent in the past 5 trading sessions.
