The global markets are interlinked for all the talk of decoupling. The Chinese markets are supposed to be a advance indicator of what is going to happen in other emerging markets.
In Oct 07 when are markets were hitting new highs, the Chinese market corrected sharply.They were 21 pc down from their peak in 2 months.Then recovered 13 pc before the Jan 2008 meltdown.
This time, they corrected even more sharply in July down about 23 pc from its peak when our markets were hitting new peaks. They have now rallied back about 13 pc again.
Last time, it took about 3 months for the fall, rise and then the big fall. This time, it has been faster. The fall and the rise have consumed about 7 weeks.
Will history repeat itself?
Domestically, now the cues have been factored. The next positive triggers could be the half year results in October unless we have some unforseen event globally
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