Sensex fall was intense versus global peers

While other global indices fell by around 3 to 5 per cent this week, domestic bourses corrected by more than 10 per cent since last Friday.

The correction was nearly three times that of the US markets, which started sliding over interest rate concerns, and much sharper than the 2 to 3 per cent drop in Asian markets.

"India has had its share of speculative money and its normal for those people to claim their pound of flesh when people forget that the market is not unidirectional," said the head of a prominent foreign investment firm with India.

"I was advising my clients abroad, who had the option, to invest in other markets which offer greater value for money," he added.

Much before the correction, the ascent of the benchmark Sensex was anything but phenomenal. Towards the end of last week, the Sensex was on the verge of doubling the value of its stocks in just one year, with yearly returns hovering around 96 per cent mark.

In comparison, the next best performer in the region, the Nikkei, was up by just 55 per cent at the same time.

Other regional indices too had seen much lower levels of growth throughout the last one year, with the Jakarta composite peaking at around 47 per cent and the Straits Times managing just around 23 per cent during the year and the Hang Seng, around 25 per cent.

The 96 per cent figure comes out as even more spectacular compared with the modest 12.7 per cent yearly returns that the Dow Jones Industrial had given last week and the 16 per cent given by the more growth-oriented Nasdaq index.

While the US Nasdaq has corrected by around 3 per cent over the last week, the Dow, the Nikkei and the Malaysian and Singaporean indices slipped by 2 per cent each.

However, the Sensex had company in the South American and the Russian markets, most of which had seen similarly spectacular movements last year, but also lost around 10 per cent of their value over the past week.

"All over the world, equity markets have had a healthy run throughout the last year and it is time to catch one's breath. India's loss has been greater till now because it has also been the biggest gainer in emerging markets and certainly in the Asia Pacific region," said another broker with a large foreign clientele.

Though the Indian markets have thus far defied the international markets with its gravity defying performance over the past one year, most FII brokers and advisors now expect it to pick up its cues more from international situation also.

"We are unlikely to see any improvement in foreign markets make its impact here as well, though profit-booking by investors who got in early enough is likely to continue," he added.