At the end of Tuesday’s trading session, the NSE Nifty 50 and the BSE Sensex had trailing price-earnings (P/E) multiples of 21.2 times and 21.3 times, respectively. This compares to their P/Es of 22.8 at the start of this year. India’s benchmark P/Es have softened more than 23 two years ago. This shows that the market is cheaper than before, easing investor concerns about overvaluation, which, along with slower growth, has helped de-risk foreign investors towards India.
InstitutionsValue premium declines: Benchmarks are down more than 8% in 2026 amid investor caution over the fallout from the West Asian conflict, but local equities still trade at a premium to EM peers
The valuation premium of Indian benchmarks is now limited with respect to nine of the 12 major global equity indices. For example, Nifty’s premium over the Hong Kong benchmark has declined to 1.8 times from 2.3 times at the beginning of the year. The premium over the German DAX and the French CAC 40 fell from 1.5 to around 1.2, according to the same comparison. In the case of other benchmarks, including the US Dow Jones and S&P 500, Indian benchmarks continued to trade at a slight discount, as they did earlier.
Benchmarks have fallen more than 8% in 2026, including a 4% decline since early March as investors grew cautious amid heightened concerns about the impact of the West Asian conflict between Iran and Israel. Year-to-date, India is the second-worst performing market among major markets in the world after Indonesia where the local benchmark has lost 14%.
