Valuations ease after sell-off, yet stay relatively elevated
Why it matters: Elevated valuations limit upside and raise risk as the market grapples with geopolitical uncertainty.
- Banks & financial firms retain valuations above 3‑ and 5‑year averages, with three‑quarters trading above their long‑term price‑book (P/B) multiples.
- Non‑lending companies (manufacturing, services, trading) see 56% below their three‑year price‑earnings (P/E) multiples and 42% cheaper than a decade ago.
- Overall market: nearly three‑quarters of stocks trade below their 200‑day moving averages, reflecting bearish sentiment as indices hover near 11‑month lows.
- Geopolitical tension: the latest Iran‑Israel conflict adds risk, further pressuring the benchmark domestic equity indices.
Valuations have softened after a sell‑off but stay relatively high; banks remain resilient above long‑term averages, while non‑lending firms show mixed price‑earnings discounts, and most stocks sit below their 200‑day moving averages amid geopolitical worries.
