BSE Sensex, Nifty50 crash: How Indian markets compare globally and why it may be the start of a stock picker’s market

Stock market crash an opportunity? The BJP’s underwhelming performance in the recent Lok Sabha elections has wiped out nearly all the gains made by the Nifty this year in a single day. On Tuesday, the Nifty plummeted by 1,379 points or 5.93%, yet it continues to trade at a premium valuation compared to other global markets.
India’s one-year forward earnings multiple of 21.27 is the second highest, trailing only Japan, according to an ET report.
India and Japan have both experienced significant market rallies, fueled by India’s rapid economic growth and Japan’s corporate reforms.

In comparison, the Chinese market is currently trading at 11 times its one-year forward earnings, while markets in Singapore, Korea, Hong Kong, and Brazil are trading even lower than China.
Foreign investors have withdrawn Rs 50,000 crore from Indian equities so far this year, with a significant portion of these funds being redirected to more affordable markets like China.
Aditya Khemka, a fund manager at InCred Asset Management, believes that Tuesday’s market correction marks the beginning of a stock picker’s market and potentially a prolonged pause for passive investors.
“We expect the market to be sideways in the near future and businesses with strong earnings momentum and reasonable valuations to outperform the market,” he said.