With crude oil surging to $142 a barrel, economies across the world are facing fuel shocks in terms of the burgeoning oil budget. Only Latin America has turned the tide in its favour, says Maarten Jan Bakkum, ING's emerging market strategist. Maarten shares his views with Vandana on the Indian market and why Latin America is attracting enormous foreign investment. Excerpts: 

In the wake of a global stock meltdown, how do you view the Indian market? How are valuations and which sectors do you find interesting?

The Indian market has corrected a lot already. Valuations are clearly more attractive than they were earlier this year. But in an environment of high energy prices, pressure will remain high on budget and balance of payments. Inflation and interest rates may have to go a bit higher before they come down again. All in all, it is a bit early to start buying the Indian market already.

The most interesting sectors are the good long-term growth plays such as infrastructure and exports as the rupee could fall a bit more. The 12-month forward corporate earnings growth in India should be between 15 and 20 per cent. ING has forecast a GDP growth of 6-7 per cent for the next two years.

What signals are you getting from global investors, not just for India but across the region? Are people going for further underweight in their India position in the next few months?

I do not think many investors have an underweight position in India yet. So if things would deteriorate, there is more money to flow out. At the same time, an increasing number of investors will be more interested to buy from a value point of view. Overall, I do not expect  that flows will stay as negative as they have been over the past few months.

Do you think domestic institutional investors' corpus in India is substantial enough to compensate for the exodus of capital that we have seen in the last few months?

Probably not in the short term. In the longer term, I strongly believe that domestic money will be much more important in the Indian market. The country will then be not as vulnerable in difficult global times.

What makes ING bullish on Latin American equities?

Dramatically improved risk profile, good domestic demand growth (infrastructure and consumption), coupled with the region being a net exporter of energy and other commodities, have resulted in Latin America being relatively insulated from the global financial market turmoil.