Stocks logged their biggest monthly slump since March 2020 on Monday, with the benchmark Sensex closing at its lowest level in over two years, as the intensifying war in West Asia drove oil prices above $115 a barrel and stoked growth worries in the world’s third-largest crude importer.
The Nifty 50 dropped 2.14 per cent to a near one-year low of 22331.4 and the BSE Sensex shed 2.22 per cent to 71947.55.
The benchmarks have lost more than 11 per cent each in March and are down 5.1 per cent and 7.1 per cent in FY26, which ends on Tuesday.
Valuations eased
Market valuations have eased amid the broad-based selloff. As of March 13, 2026, the Nifty 50 was trading at a 12-month forward price earnings ratio (P/E) of 20.2, down from 21.5 at the end of December, with the recent compression driven by foreign outflows amid escalating tensions in West Asia, rupee depreciation and higher energy prices.
A forward P/E ratio helps investors evaluate if a stock is over- or undervalued based on anticipated growth rather than past performance.
India’s earnings differential with emerging markets is also narrowing. The P/E premium of Nifty 50 against MSCI EM has reduced from 77 per cent in March 2025 to 58 per cent by the end of February 2026.
Analysts see the valuation easing as a prospect of a favourable entry for investors. “With our base case assuming gradual de-escalation, current valuation provides a favourable entry point, with limited downside,” analysts at Elara Capital said on Monday.
