The New Dawn

2014 was a great year for markets in Asia, with both India and China returning above 30%. Nifty has made lifetime highs, whereas China is still trading halfway down from its crazy highs reached in 2007.

2015 should be a promising year for markets here, with the two biggest markets finally getting their mozo back, after a year aimless years. The US is close to halting and reversing its QE, so expect some volatility from there too.

India should be interesting as RBI is expected to cut in Feb, and there are hopes from the budget in Feb as well. Expect good returns from banking names, specially PSU banking names - smaller names could be best placed as these are ones with highest beta. Also, autos and real estate names should be good bets, given their interest sensitive nature. 

Submerging Markets?

The world markets were in rude shock after the great rally in 2013, and haven't had the best of starts in January. Most big global indices are down, with China slowing down, and US just going on with the Taper plan. Emerging markets have taken both the news with a pinch of salt, and add to it the ongoing crisis in Argentina, Egypt, Turkey and Thailand, they should experience more outflows. 

However, things could get interesting here. With most data pointing towards a risk-off in EM assets, we may actually finally see EM outperforming DM this year. S&P is already trading at peak levels and peak valuations, and shouldn't see much of an upside. Some of the better emerging markets, like Korea or Taiwan, may see growth return back on healing economies, and can start outperforming.  I would think the markets with the strongest currencies should outperform ones with weak and volatile currencies, and hence I would think Korea and Taiwan could be the best performing markets here.