India's valuation premium to emerging market peers at five-month high

Nifty P/E 82% higher than MSCI EM; up from 54% in June

A sharp rally in domestic stocks from June lows has once again rendered Indian markets expensive to their emerging-market (EM) peers. The 12-month forward price-to-earnings (P/E) multiple for the Nifty50 Index is around 20.6x — 82 per cent higher than 11.3 per cent for the MSCI EM Index.

India’s valuation premium has hit a five-month high. This is on the back of sharp outperformance to EM and global peers from June lows and also due to earnings downgrades, following the April-June quarter of 2022-23 earnings.

When the Nifty hit its 2022 high on January 17, India’s P/E