Sensex at 60K: Stock valuation at highest since Lehman crisis

The market looks pricey on market cap to GDP ratio, which reached a new post-Lehman crisis high of 127.6 per cent on Friday

As the benchmark BSE Sensex hit the 60,000 mark on Friday for the first time, most of the index valuation parameters also touched a new high, with the exception of price to earnings multiple.

The BSE Sensex ended Friday with a trailing price-to-earnings multiple (P/E) of 31.3x, which was nearly 10 per cent lower than its P/E multiple when it first crossed the 50,000-mark on February 3. Analysts, however, say this doesn’t mean that the markets are cheaper than what they were at the beginning of calendar year 2021. 

This is because the index’s current earnings are not comparable with the numbers