INDIA- HOT EMERGING MARKET

India may soon become the preferred destination for international investors as the country's weight in global emerging market (GEM) funds has hit a record high of 10.5% in June. These funds are overwhelmingly bullish on India, says a Merrill Lynch survey of 60 global investors. India's weight among GEM funds was 7.5% during the peak of 2007, which later declined below 5% in the middle of 2008. The weight rose to 8.5% in November 2010, but dipped below 5% within a year. However, it started rising since September last in the hope of a business-friendly government at the Centre, and ever since Narendra Modi won the elections by a thumping majority, reigniting hopes of a revival of stalled projects, Sensex has been flirting with greater heights. Foreign institutional investors ( FIIs) have pumped in nearly Rs 69,000 crore so far this year in Indian equities. As a result, the Sensex surged 23% in rupee terms, and 20% in dollar terms, outperforming almost all major global Indices. "Over the past two weeks, we have met nearly 60 investors. There's practically no debate that re-rating would drive markets, but in the near-term, some investors agreed that there could be a slight pullback due to global concerns and a possible monsoon failure. But most wanted to buy in the dip," said Merrill Lynch.