Will the growth story of China and India continue?

The Asian tigers China and India grown in the past five years more than 7 percent in GDP. It was said they are going to rule the financial world for another 20 years. But post 2008, the GDPs of these countries started climbing down and for the financial year 2012-2013, both the countries have lowered their growth. If this happens for the next three years, then their growth would as equal as other countries. Will this growth would continue.

From Stock market's perspective, China's Shanghai share index never reached the 2008 high ever after 4 years. In fact, China Index has under performed for the past 4 years when compared to other world indices. For Indian Stock Index, it has come close to 2008 high, but it has not crossed it. In 2011, it has seen a decline from the top.  

For a Economy to grow, the Stock Indices should grow. If it fails to do so, then the Economy would shrink. The GDP growth would not continue. Going by these, it seems, both countries are unlikely to have growth of more 7 percent in coming years.

Will European debt problem once again bring down the Markets?

In August 2011, all the world stock indices declined heavily and it was said that the Europeon debt crisis was the reason for the fall. But from november most of indices rallied and some index even made a new all time high.

Is the crisis over?  Are the fundamentals of the other Economies are stronger to warrant a rally? The answer is no. The Europeon debt crisis is not over. It is discounted by the market in the short term. But it is not over. It will once taunt the market.

The markets are likely to cut the last six months low in coming months. The recent rally is really a bear market rally. It is likely to be followed by big decline in another three to four months.