When the dust settles on the turmoil in world equity markets, there could be a silver lining for investors in emerging economies such as China and India, which have also had their share of the troubles but are better placed to weather the storm. Both the Asian giants have been on a monetary tightening spree, New Delhi being far more aggressive than Beijing to batten down inflation that is surging way above comfort levels. The tough action has slowed growth, hurt corporate earnings and slammed share prices. India has increased rates 11 times since the tightening began over 16 months ago, while China has hiked five times. Brazil and Russia, that make up the BRIC nations, have done so eight and two times respectively. The consensus view among economists indicate that inflation may well have peaked and the rate-hiking cycle is nearing an end, which would mean the worst is behind them. Article continues below In comparison, the debt crisis hobbling Europe and the US has the potential to worsen and could cause a second dip recession. The meltdown in global equity markets last week reflected this underlying fear, and the outlook, despite a better-than-expected US jobs report on Friday, is clearly downbeat. Discounting bad news \"Panicky investors seldom think rationally,\" said equity strategist Jagan Shah. \"When the cloud clears, people will again start looking for better returns and India should be on the radar.\" Indian shares which have slid about 16 per cent this year — the most among major world markets — have already discounted the bad news and look attractive for investors with a medium to long-term horizon, he said. \"There has been a big correction in our valuations and many blue-chips are available at near their book values,\" Shah said. \"Even after a slowdown, the economy should expand at least by around eight per cent this year, while the US faces a possible contraction.\" The top-30 Sensex on the Bombay Stock Exchange fell almost five per cent last week to its lowest close in 14 months. The widely tracked benchmark sank below 17,000 on Friday for the first time since June last year as global investor jitters struck home, but pulled back to close at 17,305.87. Gloomy world The Reserve Bank of India (RBI), which raised rates by an unexpectedly stiff 50 basis points this month and warned of more increases to cool inflation, could pause in September due to the gloomy world economic environment. \"Fears of global recession have just re-emerged. I suspect when we next meet in September, it will be an issue,\" Subir Gokarn, the RBI deputy governor in charge of monetary policy, said in Hyderabad on Friday. A drop in world commodity prices, including oil, could set the ground for the RBI to halt its tightening cycle. \"If this is the beginning of a softening trend, it will have some impact on our thinking in terms of our stance,\" Gokarn said. Steep increases in rates have taken a toll, with Indian manufacturing growth slowing in July for the third consecutive month, a HSBC Markit survey showed. High borrowing costs have also dented sales of automobiles and houses. Maruti Suzuki, which has about half the market share for all new cars sold in India, saw July sales plunging a quarter as production of its popular Swift Dzire sedan was hit by a shift in its manufacturing facility.