Is market valuation of any relevance?

High weight of low P/E stocks in index pulls down valuation, says report

It is interesting to note that while the popular stock market indices such as the S&P BSE Sensex and Nifty 50 are just a shade lower than their all-time highs, valuations are still not seen as expensive, even as corporate earnings have been muted for three years in a row.

This is where a Kotak Institutional Equities report led by Sanjeev Prasad throws light on some insightful facts, and more important, could be a warning signal for investors.

“The valuations of the Indian market look reasonable on a top-down basis but the valuations of individual stocks are super-expensive