Nifty P/E multiple up 50% from lows of March on 'benign liquidity' in mkt

At current level, index valuation 18% lower than its record high price of 30x in June 2019

The continued rally on the bourses despite dismal economic data after the Covid-19 pandemic is widening the gap between index valuation and underlying fundamentals. 

At Friday’s close, the benchmark NSE Nifty50 index was trading at a trailing price-to-earnings multiple of 25.5x, about 50 per cent higher than its valuation on March 23, 2020, when it had closed at a three-year low of 7,610 points. That day the index P/E multiple had declined to 17.2x — the lowest since May 2014. 

At its current level, the index valuation is now only 18 per cent lower than its record high price-to-earnings multiple