BSE-500 P/E ratio closing in on decade's average as correction sets in

Stock market rallied strongly after the lows due to the coronavirus pandemic in 2020.

The average price-to-earnings ratio of S&P BSE-500 stocks is now close to the average level of last 10 years. The correction in stocks that started a few months ago, coupled with strong earnings in 2021 quarters, has brought the PE ratios down, according to Bloomberg data.

The Bloomberg data uses the current price of the stock and earnings in the trailing 12 months to arrive at the P/E multiple.

Though there is no global or domestic benchmark for PE ratios, they have stayed in a certain range. For instance, the PE ratio for BSE 500 in India has largely stayed