``With markets trading at approximately 15 times PE multiples on FY11 estimates, we are wary of the fact that India is no longer attractively valued (within the emerging market basket) and any reversal of the carry trade could trigger corrections``, says Fortis Mutual Fund.
Highlighting the equity market scenario the AMC pointed out that the month of November witnessed the 5th consecutive month when DXY, a measure of value of USD as a basket of 6 major world currencies, closed lower.
The USD has been weak ever since the Federal Reserve has maintained its intent to keep liquidity high till the economy is back on track and unemployment rate starts ticking down.
Fortis which oversees average AUM of nearly Rs 91 billion in November believes that this cheap liquidity has been feeding the carry trade in riskier assets like emerging market equities and commodities (both hard and soft) and Indian markets were no different - November saw a strong up move of 13% from the month lows.
Further foreign investors have been aggressive iwith cumulative USD 16 billion of inflows and good corporate results along with positive sound bytes from the political and bureaucracy with regards to tax reforms have sustained the euphoria.
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