State of Indian Stock Markets – July 2016

This is the monthly update of the state of Indian stock markets. As of now, it comprises only of an analysis of Nifty50‘s ratios, namely P/E, P/BV ratios and Dividend Yield.

The numbers are averages of P/E, P/BV and Dividend Yield in each month. The heat maps don’t show the maximum and minimum values of each month.

Caution – Please remember that relying solely on averages can be risky. Its like a 6-feet person drowning in a river which had an average depth of 4-feet. 🙂

Don’t make any investment decisions based solely on just one or two ‘average’ indicators. At most, treat these heat maps as broad indicators of market sentiments.

So here are the Heat Maps…

P/E (Monthly Average)

price to earning nifty july 2016

P/E Ratio (on last day of July 2016): 23.62
P/E Ratio (on last day of June 2016): 22.75

P/BV (Monthly Average)

price to book nifty july 2016

P/BV Ratio (on last day of July 2016): 3.38
P/BV Ratio (on last day of June 2016): 3.37

Dividend Yield (Monthly Average)

dividend yield nifty july 2016

Dividend Yield (last day of July 2016): 1.27%
Dividend Yield (last day of June 2016): 1.25%
You can read about last month’s update here. The State of Markets section has also been updated (link).
For detailed analysis of the relation between investments made at various P/E, P/BV and Dividend Yield levels and the historical returns, please have a look at these 3 posts: