The emerging factor in Indian markets

Besides macro-balances - current account and the fiscal gaps - of a number of EMs have shown remarkable improvement since the taper tantrum of 2013

Where are Indian markets headed in 2019? The stock answer is that it all depends on the election outcome. That might be an oversimplification. Markets move in packs and India’s fate is tied to that of emerging markets (EM). If EMs fall off the investment map, India is unlikely to produce high asset returns even with a favourable election outcome. On the flip side, a sustained EM rally could set a floor for our local markets even if the political outturn disappoints.

After a weak first nine months, EMs picked up in November last year. There was a rally across