Market Update - July 2023

The Indian equity markets are currently at an all-time high with the Nifty crossing 19k for the first time in the last few trading sessions. The Nifty PE ratio is currently 22.51 (average around 20). Below is a table of the Nifty PE ratios since 2000. Looking at historical PE ratios the markets are currently more expensive than average. Technical View of the Indian markets- The markets had reached an All Time High (ATH) in Oct 21 with the Nifty at 18,604 (Point A in graph). It then corrected from there to about 15,200 on the Nifty by June 22 before swinging back up in Nov- Dec 22 (point B) and testing the previous ATH. There was a minor correction from there on till about March 23 with the markets now crossing those ATH’s (point D). Note: Point C is the crossing over of the 50-day moving average and the 200-day moving average. When the 50-day crosses over the 200- day we consider it a positive (bullish) trend. We look at some past instances in history where a similar pattern has repeated itself.