Why is BAM cautious about India?

The monsoon has come early for investors in India this year. A shock result from the national elections opened up the possibility, first, of a hung parliament, then of a swing to the left as a new coalition government was formed. With economic liberalisation apparently under threat, the heavens opened and the Bombay Stock Exchange Sensex Index fell by more than 20% in the first half of May. It has now recovered some of that ground, but the key question is when the market will stabilise? No-one wants to catch a falling knife, but the consensus is still that India has remarkable growth pote...