Indian market may seem to be on steroids, but tread cautiously now

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Equity markets worldwide turned choppy this past week, as jittery investors navigated uncertain currents. After a short bout of divergence, the Indian bourses returned to echoing global markets and displayed whipsaw movements in tandem with the overseas peers. Amid fears of a possible global contagion triggered by a probable default by debt-ridden Chinese behemoth Evergrande and the overhang of the US Fed announcement on tapering and interest rate timelines, investor sentiment swayed between pessimism and optimism. However, towards the latter half of the session, the pressure on the bourses eased as each thread of the story began to unravel. Concerns over China’s 'Lehman moment' and its global linkages were laid to rest as US junk bonds were visibly unbothered by the debacle, while yields on their Chinese counterparts soared. The liquidity infusion into the banking system worth $18.6 billion by China’s central bank also cooled off some anxiety. Even the Fed’s hawkish s
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