Market corrections: US slowdown or ??????

The sharp corrections in the capital markets world over during January 08 are attributed to the concerns over a possible US recession and its spill over to the global economies. By now there remains little doubt that US economy is headed for a steep decline. First it was the sub-prime mortgage crisis and credit card defaults, now huge losses by Citi group and Morgan Stanley. The signs are getting clearer as the days pass by. Few will argue that this seemingly imminent recession will have its implications on other economies, both developed and emerging. They will too bear the brunt of US slowdown, given the interconnectivity of global economies in this liberal era. But no one seems to be sure as to what extent a US recession will hit other economies. Particularly for India, analysts seem quite positive. Most of them believe India’s domestic consumption driven economy will sail through this turmoil. Some even thinks India will benefit from a US recession as more jobs will shift towards India. Here lies the contradiction as to then why India’s bourses took a greater plunge than Dow Jones on concerns of a US slowdown??
According to financial market data provided by S & P, India was the fourth worst hit market during Jan08 with a correction of 16%. The loss was 12.44 for the emerging markets against 7.83% for the developed markets. 16 of the 26 emerging markets posted a double digit loss. Whereas the Dow Jones corrected by only 6.07%. This clearly indicates there is more to it than what meets the eye. Asian markets, it seems, are being played into the hands of western FIIs. Otherwise why would all asian markets rise and fall in rhythm? If the FII flows to India are at an all time high, so would be the withdrawls. It’s a natural cycle. So whether a US slowdown or not, markets will correct sharply in between scaling new highs. The 'Monkey business in village' story relates to the asian markets more now than ever.