For Fuller, India remains a favourite over the long term. He further states that Indian valuations are still the highest in Asia despite the correction.

Fuller states that markets are beginning to see some reasonably attractive valuations. He would not want to classify the current phase as a bear market, rather he would call it a medium-term weakness.

He expects a bullish trend to start towards the end of October with good buying opportunities. In fact, he expects 2007-2008 to be extremely bullish years.

Excerpts from CNBC - TV18's exclusive interview with David Fuller:

Are we in the process of bottoming out globally or is there more pain left?

I think we are in the process of stabilising globally. It is probably too early to say that we are actually bottoming out. But I feel that the markets have fallen back to levels, where we are beginning to see some reasonably attractive valuations once again.

But the conditions are still quite nervous, particularly regarding the policies of central banks, on what they would be doing with interest rates over the short-term.

We have to remember that investors are shocked because they have seen markets fall much faster during May and the early part of June than they had experienced for over three years.

So, investors are going to be nervous for quite some time. It will take a lengthy period of counter lessons.

I think there will be several months where the markets will be testing support levels; going quiet and stabilizing before it gets into a bull market environment. I would expect that to happen from the end of October. We have to see if the markets quieten and begin to range as I referred to; a period of counter lessons.

Do you expect it to be range-bound for emerging markets like India as well since valuations might be attractive and the knock has been hard?

I do expect India to stabilise as well. India remains my very favourite stock market for the long-term. The Indian valuations became quite expensive; the most expensive among the Asian emerging markets, back in May.

Now, valuations have improved quite a bit in recent weeks as a result of the correction, but they are still on the higher side.

I did watch the Indian finance minister's interview last week. He said that he felt valuations in India had come back to a fair value and I would agree with him on that.

But when global investors look at India, they are interested but they are also a bit nervous.

They feel that India is still on the highest valuation in Asia. While it has some of the best potential, they won't be rushing in. People with cash will watch and wait to see if the markets have clearly stabilised.

What will happen after this period that you are talking about?

I do not classify this as a bear market although statistically some may call it a bear market. Certainly for investors, who are long at the top in May will feel like this is a bear market. I classify this as much more of a medium term correction in a long-term global bull market.

In the second year of the US presidential cycle, historically it has been the weakest year for the stock market. Now, 2006 is the second year of US presidential cycle. It is when US and other countries are raising interest rates to correct that some of the excesses have developed in the economy with over heating and some inflation pressures.

Historically, the third year of the US presidential cycle has been the most bullish on the Wall Street. It has also helped to create an extremely bullish environment for other stock markets around the world.

So I really feel that the best buying opportunity in India will probably be around the end of September-October. Thereafter, the fourth quarter of this year and 2008 would be an extremely bullish year.

The only thing that would change would be Central Bank's reaction in terms of their efforts to lower levels of inflation; in fact, inflations that they created, I may add.

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