Nifty's PE ratio hits two-month low, slips below 20 mark; what should investors do?
The 18 to 22 range of the Nifty PE is generally considered fairly valued.
- Jun 9, 2026,
- Updated Jun 9, 2026 9:45 AM IST
Nifty's Price-to-Earnings (PE) ratio slipped below the 20 mark on Monday (June 8). The PE ratio stood at 19.96 mark. The PE ratio of the 50 stock index last fell below the 20 mark on April 2 this year, according to Bloomberg data. That time too, PE ratio stood at 19.96. Historically, the long-term average PE ratio for the Nifty 50 has remained in the range of 19 to 21.
The 18 to 22 range of the Nifty PE is generally considered fairly valued. In this phase, analysts generally advise regular investing in SIPs and balanced allocation strategies. These are expected to usually work well because valuations are neither extremely cheap nor excessively expensive.
This also signifies that slipping below the 20 mark means an investor is no longer paying a steep premium for the earnings generated by India’s top 50 companies.
The fall in Nifty's PE ratio comes after the Sensex and Nifty extended their losing streak for the second straight session on Monday as Iran and Israel were engaged in attacks, which dampened market sentiment across the globe.
Sensex ended 719 pts lower at 73,524 and Nifty slipped 244 pts to close at 23,123.
Additionally, persistent foreign institutional outflows, weakness in the rupee, and concerns that stronger US economic data could keep global interest rates elevated further weighed on sentiment in the Indian market.
Ajit Mishra – SVP, Research, Religare Broking said, "Technically, the Nifty has moved closer to the lower band of its declining channel near 23,000. While the index managed to defend this level on a closing basis, the overall trend remains weak and vulnerable to further downside toward the 22,500–22,800 zone if support is decisively breached. On the upside, the 23,300–23,600 zone is expected to act as a resistance band. Given the prevailing uncertainty and heightened global volatility, we continue to maintain a cautious stance and prefer a sell-on-rise approach in the index."
Hitesh Tailor, Technical Research Analyst at Choice Equity Broking said, , "The overall market bias remains cautiously negative as the index continues to trade below key resistance levels despite intraday recovery attempts. Broad-based weakness across sectors and the failure to sustain higher levels indicate that market participants remain risk-averse. As long as the Sensex holds above the 72,750–73,000 support zone, intermittent pullback rallies may continue. However, a decisive move above 73,900–74,000 is required to regain bullish momentum, while a breach of support could trigger further downside pressure in the near term."
Nifty's Price-to-Earnings (PE) ratio slipped below the 20 mark on Monday (June 8). The PE ratio stood at 19.96 mark. The PE ratio of the 50 stock index last fell below the 20 mark on April 2 this year, according to Bloomberg data. That time too, PE ratio stood at 19.96. Historically, the long-term average PE ratio for the Nifty 50 has remained in the range of 19 to 21.
The 18 to 22 range of the Nifty PE is generally considered fairly valued. In this phase, analysts generally advise regular investing in SIPs and balanced allocation strategies. These are expected to usually work well because valuations are neither extremely cheap nor excessively expensive.
This also signifies that slipping below the 20 mark means an investor is no longer paying a steep premium for the earnings generated by India’s top 50 companies.
The fall in Nifty's PE ratio comes after the Sensex and Nifty extended their losing streak for the second straight session on Monday as Iran and Israel were engaged in attacks, which dampened market sentiment across the globe.
Sensex ended 719 pts lower at 73,524 and Nifty slipped 244 pts to close at 23,123.
Additionally, persistent foreign institutional outflows, weakness in the rupee, and concerns that stronger US economic data could keep global interest rates elevated further weighed on sentiment in the Indian market.
Ajit Mishra – SVP, Research, Religare Broking said, "Technically, the Nifty has moved closer to the lower band of its declining channel near 23,000. While the index managed to defend this level on a closing basis, the overall trend remains weak and vulnerable to further downside toward the 22,500–22,800 zone if support is decisively breached. On the upside, the 23,300–23,600 zone is expected to act as a resistance band. Given the prevailing uncertainty and heightened global volatility, we continue to maintain a cautious stance and prefer a sell-on-rise approach in the index."
Hitesh Tailor, Technical Research Analyst at Choice Equity Broking said, , "The overall market bias remains cautiously negative as the index continues to trade below key resistance levels despite intraday recovery attempts. Broad-based weakness across sectors and the failure to sustain higher levels indicate that market participants remain risk-averse. As long as the Sensex holds above the 72,750–73,000 support zone, intermittent pullback rallies may continue. However, a decisive move above 73,900–74,000 is required to regain bullish momentum, while a breach of support could trigger further downside pressure in the near term."