BNP Paribas sees value in Indian stocks even as indices hit new highs

Predicts Sensex will hit 37,500 by 2018-end, as gains from reforms in past 18 months are likely to start flowing in

By at least one measure, Indian equities look attractive relative to their regional peers even after posting new records in the new year.

That’s the view of BNP Paribas, which forecasts the benchmark S&P BSE Sensex to post its third annual gain in 2018, helped by a revival in company earnings and economic growth.

The euphoria in equity markets worldwide has left the Sensex trading at 3.2 times book value, not cheap in absolute terms. But with the MSCI Asia Pacific Index trading at 1.73 times -- the highest level since 2008 -- the gap between the two gauges’ ratio