the similar magnitude of incidents, so Nifty near term Tg would be 10990, which is a 50% retracement from the event days gain and it happened after all the big moves in the index.
Great decision by the govt. implementing lowering the tax rate.
Though the macroeconomy doesn't change within a year, it will take time(3-5 yrs) to reflect on the real economy.
Along with the lower tax rate, India has to improve the ease of doing business and land reform
Now Nifty PE is at 27.72, if the nifty 50's earning grows by 12%, then EPS will become 455.5. PE will be 24.75 which is not at all comfortable valuation for the investment.
History repeats itself, in the past we saw
the similar magnitude of incidents, so Nifty near term Tg would be 10990, which is a 50% retracement from the event days gain and it happened after all the big moves in the index.
Nifty at 11274
PE 27.72
EPS 406.70
If earnings grow by 20%
Then EPS 488.04
PE 23.10
Next year if earnings grows by 20%
Then EPS 585.60
PE 19.25
Nifty if comes to 16 PE(which is ideal for broader investment) then it will become
9370 (PE: 16 * EPS: 585.60)
As per the data Mean PE of Nifty 19.68, So if taking 20% compounding effect for the next 2 yrs, then nifty's level after 2 yr has to be, (EPS: 585.60 * PE: 19.68 =) 11524
taking the standard deviation PE of Nifty 15.64, calculating similarly Nifty level 585.06 * PE 15.64 = 9150