Indian stocks over the past two years have been more volatile than those in a number of global markets and valuations on domestic bourses are the highest among select emerging economies, the government said on Thursday.

"In the period January 2006 to December 2007, the volatility of weekly returns of Indian (stock) indices was higher as compared to indices outside India such as S&P 500 of US and Kospi of South Korea," according to the Economic Survey 2007-08 report tabled in Parliament by Finance Minister P Chidambaram.

In terms of price-to-earnings ratio, a key parameter to determine the valuation of stocks, India was the most expensive among select emerging markets, the survey added.

"The valuation of Indian stocks as reflected in P/E multiples of around 27 times at end-December 2007 was the highest amongst the select emerging market economies such as South Korea, Thailand, Malaysia and Taiwan," the Survey said.

Regarding the cumulative change in movement over the 2003 levels, the report said that among the Asian stock markets, Chinese and Indonesian markets outperformed the Indian markets.

"While the BSE Sensex rose by 47.1 per cent during 2007, SSE Composite Index of China rose by 96.7 per cent and the Jakarta Composite Index of Indonesia increased by around 52 per cent," the report added.

Other international indices which rose appreciably in 2007 were Hang Seng (Hong Kong) by 39.3 per cent, Kospi (South Korea) by 32.3 per cent and Kuala Lumpur comp Index (Malaysia) by 31.8 per cent.

Economic Survey 2007-08: Complete Coverage