D-Street over demonetisation? Sensex valuation back to pre-note ban levels

Index is trading at 21.3x its underlying trailing 12-mth earnings, against 20.9x on Nov 8 last year

Pushed by domestic investors, the Dalal Street has overcome the demonetisation blues, with the benchmark BSE Sensex valuation back to pre-currency swap levels, notwithstanding the worries of a slowdown in gross domestic product growth and corporate earnings. 

The benchmark index is now trading at 21.3x its underlying trailing 12-month earnings per share, slightly higher than the 20.9x at the close of trading on November 8 — the day demonetisation was announced. After the invalidation of high-value currency notes, the index valuation touched a low of 20.1x on November 24. The index is, however, around 300 points or one per cent