In recent years, the Bombay Stock Exchange's Sensitive Index (Sensex 30) has loosely tracked moves in the benchmark MSCI Emerging Markets Index. However, since the March 5th bounce in global markets (following the sharp selloff that began in late February), the latter has risen 10.05% vs. only 5.29% for the Sensex 30.

One factor pressuring Indian shares has been aggressive monetary policy tightening by the Reserve Bank of India. According to Bloomberg, Governor Yaga Venugopal Reddy has "surprised analysts three times since December with unscheduled . . . announcements."

Given the relatively wide recent performance gap between the two measures and ample evidence that the Chinese, among others, also seem intent on reining in excess liquidity, could the faltering Indian market be a leading indicator pointing to weaker emerging markets generally?

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.