Nifty price-to-earnings down 10%, still above long-term average

The benchmark Nifty index currently trades at 16.8 times its 12-month forward earnings estimate. At January-end, when the index had climbed to a record high, the 50-share blue-chip index traded at a price-to-earnings (P/E) multiple of 18.6 times.
 
The 10-year average P/E for the Nifty index is 15 times — nearly 14 per cent below the current level. Analysts say current market levels are close to their ‘fair-value’ and if the correction extends by another 5 to 10 per cent, valuations become ‘attractive’.
 
Markets tend to overshoot or undershoot their ‘fair value’, depending on the prevailing sentiment.  For