Deconstructing the rally

Markets across the world had been discounting doom and gloom, what with fears of a double dip in the US and worries about European debt
The Nifty’s trailing price-earnings (P-E) multiple is now at 25.3 and price-to-book at 3.9. In January 2008, when the market peaked, the Nifty’s trailing P-E was around 28.2 and price-to-book 6.5. From a P-E perspective and assuming one thinks the market in early 2008 was a rational one—a very big assumption—then market valuations are not too high.
http://www.livemint.com/2010/09/20220037/748D60AD-4526-49DD-8DF0-5D933D0A9DC4ArtVPF.pdf