Sensex trading at discount to Dow Jones for the first time since 2009

In the past two decades, the Sensex has traded at nearly a 25 per cent premium to the Dow valuation on average

A selloff on Dalal Street in the past five months has ended a long run of India’s valuation premium over the US equity market. The benchmark BSE Sensex trailing price-to-earnings (P/E) multiple has slipped below the earnings multiple of the Dow Jones Industrial Average for the first time since 2009. The Sensex is currently trading at 21.8x its underlying earnings per share over the past 12 months, down from a P/E multiple of 23.8x at the end of March last year.

 

In comparison, the Dow is trading at a P/E multiple of 22.4x, slightly down from 22.8x at the end