5 charts that reveal interesting stories on Markets and Investing.

By Alpha Research

5 charts that reveal interesting stories on Markets and Investing.

Feb 02, 2026

Please find below the 5 charts that reveal interesting stories on Markets and Investing.

Nifty-50 Index Earnings Per Share (EPS) Estimates Trend

Source: Kotak Institutional Equities estimates.

·Earnings expectations remain broadly stable: Nifty-50 EPS estimates across FY23–FY28 have shown limited revisions over recent months, indicating improving confidence in earnings visibility.

·Near-term growth is steady, not accelerating: FY25E–FY26E EPS estimates have flattened around ~₹1,015–₹1,070, suggesting a consolidation phase after strong post-COVID recovery.

·Long-term earnings trajectory remains intact: FY27E and FY28E EPS continue to trend meaningfully higher (₹1,258 and ₹1,438 respectively), reflecting expectations of structural earnings growth over the medium term.

·Peak optimism has moderated slightly: Forward-year estimates (especially FY27E–FY28E) have seen mild downward revisions from earlier peaks, pointing to normalization of margins and growth assumptions.

·Valuation comfort depends on time horizon: With near-term EPS growth muted but long-term earnings intact, market returns are likely to be more earnings-led and time-dependent rather than driven by rapid multiple expansion.

Global Market Perspectives: Valuation, Estimated growth & Opportunities

Source: Factset, Morgan stanley.

Data as of 31^st Dec 25

·Valuation dispersion is wide: US Growth (Russell 1000 Growth) is priced for perfection, while MSCI World ex-US small cap and R1000 Value indices offer better valuation comfort and downside protection.

·Best risk-adjusted opportunity lies outside crowded US growth: MSCI World ex-USA Small Cap combines reasonable valuations, diversified earnings sources, and strong dividend growth, making it the most balanced wealth-creator.

·US Value stands out as a defensive compounder: Russell 1000 Value offers lower P/E, higher yield, and steadier earnings, suitable for consistent long-term compounding.

·Emerging Markets offer high upside with risk: MSCI EM is optically cheap with strong EPS growth but comes with execution, currency, and geopolitical risks.

·Developed markets (MSCI EAFE & MSCI Europe) favour income over growth: MSCI Europe and MSCI EAFE provide higher dividend yields but relatively modest earnings growth.

Comparative Risk-Reward Profiles: Global Equity Market Valuations

Source: Factset, Morgan stanley.

Data as of 31^st Dec 25

·MSCI World ex-USA Small Cap – Best overall risk-reward:
Trades below its long-term average P/E while offering healthy EPS and dividend growth, making it the most balanced opportunity across valuation, growth, and diversification.

·Russell 1000 Value – Best defensive compounder:
Valuations are below historical averages with steady earnings and dividends, offering downside protection and reasonable upside without relying on multiple expansion.

·MSCI EM – Cheapest with highest growth optionality:
Valuations are near cycle lows and EPS growth is strong, but higher macro, currency, and geopolitical risks keep it below developed-market peers on a risk-adjusted basis.

·MSCI EAFE & MSCI Europe:
Reasonable valuations and good dividend yields, but modest earnings growth limits return potential.

·Least attractive on risk-reward – US Growth & broad US indices:
Russell 1000 Growth and S&P 500 trade above historical averages with earnings expectations already priced in, leaving limited margin for error.

Equity Mean Reversion: Historical Sensex-Gold Ratios and Future Outperformance

Source: ACEMF, MCX, Edelweiss

Data as on 31^st Dec 25

Relative valuation signal: A low Sensex–Gold ratio indicates equities are cheap relative to gold, creating a favourable setup for equity outperformance; a high ratio signals equity overvaluation and lower future returns.

Current implication: With the ratio currently below its long-term average, the setup suggests Indian equity are in sweet spot for potential turnaround.

Source: ACEMF, MCX, Edelweiss

Data as on 31^st Dec 25

Valuation signal: A high Sensex–Gold ratio (>1.20) historically favours gold over equities, while a low ratio (<1.0, especially <0.80) strongly favours equities with superior 3-year forward returns.

Investor Guidance: At current levels, it is prudent to invest only that money in equity which is not required for next 5-7 years.

BEST REGARDS

Ayush Singh | Research Analyst

Neeru Seal | Head of Research

Disclaimer: The perspectives provided reflect our expectations of the economy, market, and investments, which may or may not materialize. Investors are encouraged to conduct their own due diligence before investing".