Expect a sharp global correction by Diwali; worst over for pharma: Udayan Mukherjee

But overall, the turf for emerging markets looks very tricky for the next 6-7 months and I think we should all tread with caution out there. Particularly markets like ours where we have seen consistent outflows from foreign investors, both from the equity and from the bond market and therefore, a country which is running a fairly significant current account deficit today and the question of how to fund it in a world of shrinking liquidity, both from Europe and the US, is a very important question for both our currency and for our stock market.

So I think, if I had to stick my neck out, I would say that given that stock markets have bounced back quite significantly globally and in India close to the previous highs. I think some time in the next 5-6 months, between now and the end of the year, if you want to narrow it, between now and Diwali, there is a significant risk of a fairly pronounced global correction of between 10 and 15 percent. That is not a small correction. It may not happen immediately like next week or next fortnight, but I think in the next 4-5 months, the chance of a fairly sharp global correction, particularly in emerging markets is fairly high.

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