The U.S. financial sector fell in the final hour of trade Monday, erasing earlier gains made in the wake of China's decision to allow the yuan to appreciate against the U.S. dollar.
A tsunami of foreign money poured into Asia in the first five months of the year, only to recede -- and some say there's no better time than now to get back into certain Asian markets and sectors ahead of the next tide.
India: 'Favored destination'
The Bombay Stock Exchange's Sensitive Index, or Sensex, is up 0.5% this year so far.
"Despite being one of the most difficult EM markets to invest in, India remains a favored destination of foreign investors," said Win Thin, a strategist at Brown Brothers Harriman.
Year-to-date, India has seen foreign equity investment totaling $5.2 billion, putting it in first place among Asia's Emerging Markets, and second in the entire region only to Japan's $20.6 billion, Thin said in a research note.
The Indian economy grew 7.4% last year, and an economic official said this week that the country can grow by as much as 10% annually. Fitch Ratings also raised its outlook for its rating on India's local currency debt to "stable" from "negative" this week.
Stocks once again succumbed to late-day selling in light trading on Monday as hopes China's newfound dedication to yuan flexibility turned to doubts about the speed and magnitude of Beijing's intentions.
The market's overall bearish tone eroded the initial optimism around the benefits of the yuan move. Stocks pulled back as investors questioned the effectiveness of what is expected to be a gradual change.
"The announcement was considered to be constructive, but markets were unable to sustain that euphoria as they looked at the details," said John Brady, senior vice president at MF Global in Chicago.
The S&P 500 briefly broke above 1,130, the midpoint between its 2010 high and low and a key technical mark but was unable to hold the level, adding to the negative sentiment. The index had risen more than 8 percent over the past ten trading days.
| Index Value: | 10,442.41 |
| Trade Time: | 4:02PM EDT |
| Change: |  8.23 (0.08%) |
| Prev Close: | 10,450.64 |
| Open: | 10,452.46 |
| Day's Range: | 10,395.55 - 10,594.16 |
| 52wk Range: | 8,057.57 - 11,309.00 |
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