Some of the news during the last week was good. There are several potential vaccines in the pipeline, including at least one from India. The number of daily Covid-19 cases may be close to peaking. The economy is gradually reopening.
The stock market gained, with the Nifty up by 2.5 per cent week-on-week. That takes current price-to-earnings (PE) for the index up to the 28x levels. Optimism is all very well. But these valuations are irrational. To justify a 28 PE, you need earnings growth at around the same level (28 per cent) and that’s unlikely with corporate advisories uniformly negative,
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