The collapse of Silicon Valley Bank and the meltdown of Credit Suisse have led to much uncertainty about market trends. Investors are wary of issues surfacing in the financial sector, since those may cause widespread contagion. A financial crunch could lead to slower revenue growth, lower corporate earnings and, given rising interest rates, lower valuation discounts too. The Nifty has dropped 4.8 per cent in the past 30 days, and it is down 16.8 per cent from the all-time high of 18,887, achieved in November 2022. The benchmark index is now trading at a price-to-earnings (PE) ratio of 20.2, which is well below the two-year average of 24 and the five-year average of 26.7. However, valuations remain high in comparison to other emerging markets. For example, Brazil’s Bovespa is at PE of 6, Indonesia’s IDX is at PE of 12, and China’s Shanghai Composite is at PE of 13. But India has far higher growth projections, which arguably justifies a valuation premium.