The Asian giants, China and India, are the potential world leaders. First China and then India will in time become the largest economies and so eventually will have the biggest stock markets in the world. We want to own them before they get there and participate in that rise to power. Heaven would be the chance to buy into them at a really attractive price. We think we are almost there now.

When the Sensex index hit 21,000, we predicted that it would fall back to about 16,000. It has done this and seems to be going slightly lower again. But it has entered the buying zone and from now on we are trying to bottom fish.

On the road map the Indian market is in secular uptrend. Unlike any western market, it is several fold higher than it was in the year 2000. It has, however, been in a cyclical bear phase for a while and seems to be leading western markets by about a year.

On this basis, the current capitulation or climactic selling pressure should be the end of the entire bear period and should set up a great long term buying opportunity not just a tradable rally into the new year.

The cooling of the world economy will bring down the cost of oil, which is good for India as this is its major import. Apart from energy, the economy is almost selfsufficient.

The next support on the chart is between 14,500 and 16,000. This range is the buying zone.

With 12 interest rate hikes the government has slowed the economy but has not quite tamed inflation. It will continue to try and do so.

We expect that the 79-year old Mr Manmohan Singh may well stand down as prime minister next year and Rahul Gandhi, who is in his early 40s and the son of the President of the Indian National Congress Party, will become more prominent. The main elections are not until 2014. The market would like this.

Overseas investors do not over-own this market, but there is a lot of potential interest. An inflow of overseas funds may prevent the index from dropping much lower.

Tactically, we cannot hope to hit the exact bottom. We could start a gradual buying programme later this month with a view to building up a heavily overweight holding in our portfolios.

David Fuller's view Whether India's Sensex Index (weekly & daily) reaches the lower range mentioned above depends largely on the actions of other world markets. India is unlikely to lead on the upside until investors sense that a policy reversal following 12 consecutive interest rate hikes, and counting, is imminent.

(See also my more detailed comments on India posted Wednesday.)