The ongoing sell-off in the stock market marks the eighth market correction that has interrupted the Sensex’s four-year rally. The current decline, which has seen the benchmark index fall about 12 per cent since July 24, is part of the global market meltdown, as the US’ “sub-prime” problems threaten to become a widespread epidemic.
the significant valuation premium India now enjoys relative to most other stock markets could lead to a slowdown in liquidity flows. For institutional investors looking to cherry-pick across emerging markets, there could be investment opportunities elsewhere. The best course of action for investors with a long-term perspective is to look at declines as buying opportunities in liquid stocks focussed on domestic themes.