- Wealth PMS
The Nifty has closed the week above the 200 Day Moving Average (DMA) and below the 50 DMA, at 5868. We are now 5% up from the very recent lows of just below 5,600 on 27 June.
(Click for larger picture)
From a technical perspective we are in limbo – not bullish or bearish – with the 200 DMA providing some support,
The P/E of the Nifty has been rising recently, and EPS has been falling. Current P/E is at 17.87.
For a some strange reason it looks like we haven’t really gone into a deep dive for too long. Even a pure technical move will see the Nifty down once in a while and in six years, we have seen just six months of a move to P/Es of 12, and falling way below the 200 DMA. This is largely due to the increase in global liquidity, which seems to be coming to an end, at least for India.
With the dollar at Rs. 60, the return for foreign investors has been abysmal. If you consider levels of 44 in 2007, we are now about 33% lower in dollar terms – anyone who invested then would have seen a 33% drop just in the absolute value of their holdings.