No 2008-like panic yet but be cautious: Blackstone

India is turning out to be a favourite spot for investors as US fiscal position is uncertain and other markets are still reeling under. Even the rating agency, Standard and Poor's has assured that there is no immediate threat to India's sovereign debt rating of BBB, though loose fiscal policy and the government's inability to carry forward economic reforms could have implications in the medium term.

However, experts feel that Indian market is likely to remain volatile this year. In an interview to CNBC-TV18, Punita Kumar Sinha, Senior Managing Director, Blackstone Group said that market is likely to remain volatile this year and there might be another round of panic selling.

Though she considers India to be more expensive compared to other emerging markets, Sinha sees its growth profile better than its peers. "There is no 2008-like panic situation yet but the environment is still cautious. Long-term health of financial system in emerging markets is still a concern," she stressed.

Continuing the concerned note, Sinha sees growth slowdown in India due to inflation and interest rates. India is currently trading at 13-14x price earnings, she adds.

She is negative on infra sector on the back of higher interest rates. Meanwhile, Sinha is overweight on financials and remains underweight on realty.

Also read: Global markets may not be out of woods yet, says Udayan

Below is the edited transcript of her interview with of Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying videos.

Q: Things have moved in a dramatic fashion over the last month or so. Is the worst behind us or is there still more to come?

A: I think there is still more to come. However, if you look at what the central banks have been doing, there is a lot of liquidity with interest rates continuously coming down and the Fed keeping the interest rate low for another couple of years. That means there is enough liquidity.

If you look at the valuations, particularly of US and European markets over the last decade, US markets are pretty much at low of the last decade and fairly close to 2008 lows. Therefore, if you inject a lot of liquidity with those kinds of valuations, at least you could have temporary bounces, periodically.

I think from a very short-term perspective you could see rallies every now and then, given the low interest rate environment and the attractive valuations. But the macro and the longer term structural issues are still something that needs to be addressed. And that is going to take time. As and when we see positive news on those fronts, we can be more comfortable about the global equity markets.

Q: How do you see emerging markets in Asia doing in this kind of a scenario?

A: Interestingly, this year a lot of emerging markets haven