The Indian economy, despite weak monsoons, is expected to be among the faster growing economies of the world. The Indian equity markets are currently attractively poised with the sensex at low P/E of about 12, making valuations very attractive. Interest rates are at a historic low and may probably go further down, with plenty of surplus liquidity in the system, improvement in business fundamentals and a growing interest in the disinvestment programme. However, despite these positive factors, the Indian equity markets have declined on account of concerns on the US economy and markets and also due to the persisting supply demand mismatch in the market despite good liquidity in the system.

The low interest rates have resulted in availability of more funds to be deployed in the equity market.