Bureau Report

Mumbai, July 10: India has turned from being the best to one of the worst-performing markets globally in the first six months of present calendar year, an expert said.

"In the first six months of CY'08, Indian markets have delivered negative returns of 35 per cent, the second worst- performing after China's negative returns at 48.6 per cent," Motilal Oswal Securities' Director-Research Rajat Rajgarhia told reporters here on Tuesday.

The BSE Sensex now trades at a discount to S&P 500 and has corrected by 35 per cent from its peak of 20,873 points to close the quarter at 13,462 points in FY'08. Sensex hovered around 13,349 on Tuesday.

Over CY'04-07, the Indian markets delivered 40 per cent returns each year, the most consistent and superior returns amongst all the global markets over this period.

"The rising oil price is a key concern area for the Indian economy as oil prices have gained 53 per cent in FY'08," Rajgarhia said.

The rising import bill could worsen current account deficit and put pressure on the Rupee. Higher petro-products prices may also fuel inflation and interest rates, Rajgarhia said.

Inflation has emerged as the most worrying factor for Indian markets and investors. Inflation rose to 11.6 per cent on account of higher oil prices, spike in global commodity prices and strong demand in the domestic economy.