2008 has not been a good year for Indian Equities:-Political uncertainty, moderating growth, galloping inflation, a rising Fiscal deficit and massive Foreign Institutional Investment outflows. GDP growth dipped below the 8% mark for the first time in the last 9 quarters, and Fuel and Fertilizer subsidies are going add stress to the Fiscal deficit.
2009 is an election year and the reform process is likely to take a backseat.
FIIs meanwhile have been sellers, and every rise is being sold into at the moment.
FII NET INVESTMENTS 2008 http://www.sebi.gov.in/Index.jsp?contentDisp=FIITrends
Valuations are a lot more reasonable now, and value is gradually emerging.
More on the outlook for the Indian Economy, and valuations of Indian Equities in the next post.