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India CAPE above history as valuation warning signals return

India’s CAPE was 29.2 in July 2026 versus a long-run average of about 25, a level the article says has appeared only six times in 145 years.

Reported · Written up by our desk · Emerging Markets

LiveMint Markets points to India’s cyclically adjusted price-to-earnings ratio, or CAPE, as a valuation warning measure that it says has been seen only six times in about 145 years, with five instances ending in major losses.

The outlet says India’s CAPE read 29.22 in July 2026, modestly above the series’ long-run average of around 25, and contrasts the metric with the standard price-to-earnings ratio that can mislead when profits swing between boom and slump.

It explains that CAPE uses 10 years of inflation-adjusted profits to smooth earnings volatility, aiming to provide a cleaner read on whether a market is expensive or cheap, and notes that the tool’s value is often most visible around major turning points.

For context, LiveMint Markets cites Robert Shiller’s work and adds that the article sees similar concerns in the United States, where it says the S&P 500 CAPE is about 42 versus a long-run average of 17.8.

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