Markets surge on reform hope
Even after its outstanding performance, the Sensex is quoting near its long-term valuations.
At the current level of about 19500, the index is trading at 17 times its 2012-13 earnings and 14 times to that of 2013-14. On a standalone basis, the Sensex valuations (price to earnings multiple) look competitive to that of Jakarta Composite and Thailand's SET but cheaper than both Taiwan's Taiex and South Korea's Kospi. While net inflow from foreign institutional investors (FIIs) so far this year was $20.7 billion, South Korea saw $12.4 billion worth of stock purchases by FIIs in the period.
In dollar terms, the Indian benchmarks fared better than Asian markets even as the rupee lost more than 3% of its value in the last 11 months and remained volatile. The dollar-term gains of the Nifty and the Sensex stand near 25%.
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