Indian markets are now 80-90% correlated with emerging markets. So if there is increased volatility in the EMs because of whatever any of the Central Banks might be doing and the EM basket were to fall or move up, I think India would do that as well.

As a house, we have upgraded our outlook on EMs on a structural basis. So we have said there has been trouble for the last five years. Many of the factors, which have dragged EM performance for bottom up perspective are probably as low as they could get and therefore, we think that for the next four-five year period on a structural basis, EM should reverse their underperformance trend.

India vs. Emerging Markets:

My personal opinion is that India remains a structural safe growth bet in the EM context and as a result it will remain a core holding for most investors. To my mind, it is not something where you worry about huge downsides or huge risks if you were an investor. There are the increasing signs that Indian economy is improving from a relatively weak FY15 many. So on a three-four year basis, I think the economic growth should accelerate.

Money inflows, visible in the last few weeks, are mostly short-term in nature and could come down if global volatility increases. In India, investors are now struggling to find ideas and the midcap space looks rather expensive.

Earnings growth in FY17 : 

Bottom up numbers from consensus are still at around 17-18 percent the last time I checked but from a top-down perspective, we are more likely to get 12-13 percent print on the Sensex.