Widening yield gap makes equities cheaper relative to bonds globally

ET Intelligence Group: A sharp fall in the stock market over the past two weeks has made equities cheaper relative to bonds, according to the ET Intelligence Group’s analysis of the earnings yield of the benchmark Nifty 50 and the 10-year bond yield compiled from Bloomberg. The Nifty 50’s earnings yield — the inverse of the price-earnings multiple — has increased by 131 basis points over the bond yield for the first time since May 2009. The spread had averaged at 92 basis points in the past fift ..

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