Moneycontrol
HomeNewsOpinionMarket looks overvalued and it’s nearly May: Should we sell and go away?

Market looks overvalued and it’s nearly May: Should we sell and go away?

Nifty 50 seems to be moving towards its peak PE ratio. But Nifty 500 PE ratio surely seems to be indicating that it is bubble time and a new peak has been reached!

April 26, 2017 / 16:39 IST
Story continues below Advertisement

Vikas V Gupta

The markets have been running up from the beginning of 2017. Nifty 50 is up by nearly 11.5 percent and Nifty 500 is up by 15 percent from Jan 2017 opening. Most people think the market is overvalued. It definitely looks so if one looks at the PE ratio.

Story continues below Advertisement

Nifty 50 PE ratio currently (21 Apr 2017) stands at 23. Now, that definitely looks expensive. But wait till you look at the PE ratio of Nifty 500. Nifty 500 PE ratio is currently at 27!

Now let us look at the PE ratio for Nifty 50 and Nifty 500 on Jan 2008 at the peak. Nifty 50 was at a PE ratio of 28 and Nifty 500 was at a PE ratio of 27.