How is stock market peak of 2017 different from that of 2008?

While the Indian stock market hit an all-time high last month, the prevailing scenario differs a lot from the earlier market peak of 2008.

ET Wealth takes a closer look at the differences.


The 2008 peak was preceded by a sharp rise in stock prices
The recent high has been preceded by a relatively subdued rally.


Market peak dates: 8 Jan 2008 and 1 August 2017 Compiled by ETIG Database

Index valuations are still at a discount to the 2008 peak
The valuation re-rating happened much faster previously. Comparatively, the recent re-rating appears modest.


Earnings growth is much slower in 2017
Corporate earnings growth around the previous market high was at a much faster clip. Firms were witnessing high profit growth compared to the muted earnings this time round.


GDP growth has been muted in the past few years
The economy was clocking healthy GDP growth during the years preceding the earlier market peak.

Figure is in nominal terms

Interest rates are sliding
Interest rates in the economy were on the uptick in the years preceding the previous market peak.



Bond yield trajectory before 2008 peak



Bond yield trajectory before 2017 peak



More investors moving towards equity funds now
Investor participation in equity funds has been far higher in the run-up to the recent market peak than previously.



Top performing sectors then are not star performers now
Steel and finance firms contributed most to the previous market peak whereas the recent peak has been supported by shipping, jewellery and fertilisers stocks.



More stocks hit all-time highs in the 2008 peak
The 2008 peak saw more and more stocks listed on the NSE hitting all time highs in the run-up.