Emerging markets will attract investors once ECB hikes rates: Mirae Asset Management

Despite the positives coming out of Asian markets, the ongoing crisis in the Middle East and North Africa (MENA) can skew sentiments, said a  visibly concerned Rahul Chadha of Mirae Asset Management.  In an exclusive interview to CNBC-TV 18,  Chadha said India's dependency on imported oil is worrisome and Indian market is vulnerable to a correction.

Mirae Asset Management foresses another round of derating soon but expects valuations to become a lot more attractive. Once the ECB begins hiking rates, overall sentiment on emerging markets will become positive once again. At the moment "investors taking wait & watch approach for India."

Chadha blamed `policy paralysis' for the current underperformance by India and believes the domestic market will correct in the coming months. He remains underweight on banks but believes that PSU banks may be in limelight in H2CY11. He remains invested in IT and petrochem refining companies.