Global Stock Market Valuations: Cheapest and Most Expensive Markets (2026)

Based on forward Price-to-Earnings (P/E) ratios sourced from MSCI, the cheapest stock markets in the world tend to cluster among Emerging Markets and select Developed Markets that trade at a significant discount to the MSCI ACWI global benchmark (currently ~17.1x).

As of the latest data, the five cheapest markets are: Pakistan (4.5x), Turkey (6.2x), Hungary (6.4x), Colombia (7.5x), Egypt (7.8x). These markets trade at a discount to the global average of 13.6x, suggesting a potential valuation cushion — though low valuations can reflect structural risks, political uncertainty, or poor earnings quality.

The most expensive stock markets by forward P/E command a premium because investors expect above-average earnings growth, high corporate quality, or structural advantages. Typically, high-valuation markets include the United States (powered by mega-cap technology), India (high growth premium), and select smaller developed markets.

Currently the five most expensive markets are: India (24.2x), USA (23.2x), New Zealand (22.5x), Taiwan (22.4x), Denmark (22.1x). A high forward P/E is only justified if earnings growth materialises — otherwise these markets face valuation compression risk.

The Forward Price-to-Earnings (P/E) ratio compares a stock index's current price to its expected earnings per share over the next 12 months, based on analyst consensus estimates. Unlike the trailing P/E — which uses reported past earnings — the forward P/E is forward-looking and reflects market expectations for future profitability.

A lower forward P/E generally suggests a market is cheaply valued, while a higher forward P/E implies investors are paying a premium for expected growth or quality.

The P/E ratio is one of the most widely used valuation tools in global investing because it provides a standardized measure to compare markets regardless of their size or currency. When comparing across countries, the forward P/E allows investors to identify which national equity markets are cheap or expensive relative to their peers or a global benchmark like the MSCI ACWI.

A market trading at a significant discount to the ACWI may offer a higher margin of safety or a contrarian opportunity — though low valuations can persist due to structural risks, political instability, or poor earnings quality. Combining the forward P/E with earnings growth expectations (the PEG ratio) gives a more complete picture.

As of the latest MSCI data, the MSCI USA index has a forward P/E of 23.2x — tradeable via the ETF SPY (SPDR S&P 500). This compares to a global MSCI ACWI forward P/E of 17.1x, meaning the US market trades at a 35.4% premium to the world index. The US consistently commands a premium valuation due to its high concentration in mega-cap technology companies (Microsoft, Apple, Nvidia, Amazon, Alphabet) with strong earnings growth and global pricing power. Whether that premium is justified depends on whether US earnings growth continues to outpace global peers.

The three headline MSCI benchmarks currently show:

• MSCI ACWI (ACWI) 17.1x — the all-country global benchmark including both developed and emerging markets.
• MSCI World (DM) (IDEV) 18.8x — covers 23 developed markets. The premium over ACWI reflects the higher weight of the US.
• MSCI EM (EEM) 10.3x — covers 24 emerging markets. The discount vs ACWI reflects structural risks, currency volatility, and lower institutional quality. However, it implies potentially higher upside if those risks compress.

The trailing P/E uses actual reported earnings from the past 12 months. It is based on hard data but can be distorted by one-off items, write-downs, or earnings cycles. The forward P/E uses analyst consensus estimates for the next 12 months. It is more relevant for investors because markets are always pricing future cash flows.

The downside: estimates can be wrong, especially around recessions or geopolitical shocks. For country-level comparisons, forward P/E is generally preferred because it accounts for different cyclical positions — a market recovering from a recession may look expensive on trailing earnings but cheap on forward estimates.

Based on current MSCI data, the markets with the lowest forward P/E ratios include:

Low valuation alone is not sufficient for investment — always consider earnings quality, political risk, currency, and macro context.

Valuation-based country rotation is a well-established global macro strategy. Investors systematically overweight countries trading at a discount to global benchmarks and underweight expensive ones. The "vs ACWI" and "vs Avg" columns in our table show exactly this — the premium or discount each country commands versus the world and the simple average of all tracked markets.

A country trading at –30% vs ACWI may offer a meaningful valuation cushion, while one at +40% needs strong earnings growth to justify its premium. You can click any ETF ticker in the table above to open the full detail panel with performance, holdings, and correlation data for each country ETF on this platform.

The easiest way to gain exposure to undervalued stock markets is through country-specific ETFs listed on US exchanges. For example:

• 🇹🇷 Turkey — accessible via the TUR ETF (forward P/E: 6.2x)
• 🇨🇴 Colombia — accessible via the COLO ETF (forward P/E: 7.5x)

Low valuation does not guarantee returns. Always consider geopolitical risks, currency exposure, earnings quality, and macro context before investing.