Taresh, is now a good time to invest, or should I wait?

 Indian Equity Markets: Valuations, Trends & What Investors Should Do Now

Over the past few months, I’ve been studying multiple valuation models, macroeconomic indicators, and market behavior — and one recurring question from investors keeps coming up:

“Taresh, is now a good time to invest, or should I wait?”

The answer isn’t a simple yes or no — but a combination of valuation reality, global context, and investment behavior. Let’s break it down, step by step.

Equity Valuation Index: Where Do We Stand Today?

The first important data point comes from the Equity Valuation Index (EVI) — a model that assigns equal weights to four key valuation metrics:

• Price-to-Earnings (PE)
• Price-to-Book (PB)
• G-Sec Yield × PE
• Market-Cap-to-GDP Ratio

This generates a single reference number to help investors understand whether equities are:

As per the latest data (Nov-30, 2025), the index reads:

Equity Valuation Index = 116.5

This puts the market firmly in the Neutral zone — not cheap, not excessively overheated.

So what does this mean?

Equity markets are reasonably valued, and the intelligent investor approach is to continue disciplined investing rather than timing the market.

Market Valuation Snapshot: Sensex Perspective

The visible snippet shows us a valuation reference point:

Current valuation is slightly above historical average — implying neither a bargain nor a bubble.

This reinforces one conclusion:

We are in a stable valuation zone where SIPs, asset allocation discipline, and staggered lump-sum deployment are ideal.

Global Economic Landscape

Global macro conditions play a huge role in FPI flows and market sentiment. Here are recent updates:

• US GDP grew 3.8% in Q2CY25 (vs 0.6% in Q1) — showing strong resilience.
• Eurozone GDP grew 1.4% in Q3CY25, slightly softer but stable. ECB kept rates unchanged for the 3rd time — signaling confidence and easing inflation pressures.
• UK GDP slowed slightly to 1.3% in Q3CY25, BoE vote suggests a growing tilt toward rate cuts.
• Japan grew 2.2%, a clear improvement vs the earlier 0.3%.
• PBoC maintained record-low lending rates, signaling policy support.

Inference:
Global growth remains mixed — resilient but cautious — with central banks slowly shifting from tightening to potential easing.

India Market Update & Equity Performance

India’s markets saw a mixed start to November 2025, followed by a powerful breakout rally on November 26 — the strongest single-day gain in five months, bringing indices close to record highs.

Key drivers:

• Expectations of interest rate cuts by the RBI and US Fed
• Falling Brent crude prices
• Rupee stability
• Renewed Foreign Institutional Investor (FII) appetite
• Strong corporate earnings
• Optimism around India–US trade negotiations

Top gaining sectors in November:

Lagging sectors:

Inflation & Liquidity Position

Inflation is cooling — and that’s positive.

• CPI inflation dropped sharply to 0.25% (Oct-25) from 1.54% in Sept-25.
• WPI inflation is now -1.21%, reflecting lower input and commodity pressure.

FPI activity saw a shift:

• Net outflow ₹3,765 crore in Nov-25
• vs ₹14,610 crore net inflow in Oct-25

This reflects global uncertainty, not domestic weakness.

Outlook: What Should Investors Expect?

Here’s a balanced view going forward:

Global economic challenges may slow global growth
 But India remains structurally strong

Key domestic strengths include:

• Strong consumption cycle
• Clean corporate balance sheets
• Stable policy framework
• Improving liquidity and interest rate expectations
• Government’s fiscal prudence

Valuations have moderated from earlier peaks, making India a contrarian yet attractive long-term opportunity.

Investment Guidance for Different Investors

Final Word

The Indian equity market is currently fairly valued — not a bargain and not overheated. This is a time for discipline, asset allocation, and long-term thinking — not emotional investing.

As always, the winning strategy remains:

Plan > Predict
Process > Panic
Discipline > Timing

Disclaimer: The views expressed are for educational purposes only and do not constitute financial, investment, tax, or legal advice. Please consult qualified professionals before making decisions. Mutual fund investments are subject to market risks.

👉 Full Disclaimer | Disclosures | Terms of Use

📢 Join free live webinar —
Couple Finance Formula™ Register here