Demonetisation move by the government and likely further strengthening of dollar on hopes of Fed rate hike in December dampened the market sentiment. FIIs started pulling out money from emerging markets since October. Brokerage houses expect more pressure in the market and due to which they lower not only earnings estimates but also market target.
Deutsche Bank says while India’s balance of payments situation has improved sharply since the taper tantrum in May 2013 (when India saw significant currency volatility on foreign outflows), it will not remain immune to the outflow pressure seen across emerging markets (EMs).
