India's premium to emerging market peers at 15-month high

Sensex trades at 17.2x its one-year forward earnings compared to 12.2x of MSCI EM index

The valuation premium commanded by the Indian market over the MSCI EM (Emerging Markets) Index, a gauge for the performance of developing-nation equities, has hit a 15-month high. According to Bloomberg, the benchmark Sensex trades at 17.2 times its one-year forward earnings estimate (higher than its long-term average of 15.5 times). In comparison, the MSCI EM index trades at just 12.2 times. 

In other words, the Indian market is 41 per cent more expensive than the emerging markets basket. The Indian market has traditionally traded at a premium to the EM index; however, the gap has widened to the highest