India: Is it too late?

Forsyth Partners head of offshore equity analysis examines whether the recent market correction signals a sustained downturn.

On the Sensex Index, Indian stocks have increased nearly 28% since January 2005, despite a market correction of 11% in October 2005 7,795. The current rally is more than two years old, with the market having risen 164% since April 2003 2,949. Investors are cautious of the current climate, having seen historical rallies in India in 1992, 1994 and 2000 all ending with painful retrenchments.

So this begs the question, is recent movement a healthy correction or is it the first signs of a downturn in the market

It is important to put the current market rally in context. 1992 was a period of considerable...

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