Source: NSE, 2020

Nifty P/E ratio 

Date  P/E Ratio
14th Jan 2020 28.67
16th Mar 2020 20.93 
19th Mar 2020 18.63

Due to coronavirus fears and oil prices war, all global stock markets have fallen drastically in the past few weeks. Nifty has fallen by nearly 30% from its last peak. 

One effect of this can be seen in the above graph, here the Price-to-Earnings ratio has been declining from 20 Jan 2020 when Nifty touched its all-time high. 

A decrease in Nifty PE ratio can be seen as an opening opportunity for investing in equity markets. 

Historically, whenever the Nifty PE ratio is below 22, the 3-year return has been positive. 

This could be a good time to increase investment allocation in the equity market. 

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