-The absence of the RBI from the FX market has resulted in a 20 per cent devaluation of the Rupee since August 2011. This is the biggest devaluation undertaken by the country since 1990-91.

-While the devaluation is the most aggressive amongst emerging markets it opens the country to sizeable imported inflation, making it unlikely that the country has seen the last of the interest rate hikes from the RBI.

-Higher interest rates are eating up nearly 60 per cent of the EBITDA of Sensex companies in the First Half of FY12.

-While CLSA has let out a FY12 revised earnings growth forecast of a mere 9 per cent, it still maintains a 18-19 per cent growth in earnings for FY13.

-However, the FY13 Earnings estimate are likely to contract sizeably leading to a review of the forecast earnings for FY13.

-If earnings decline continue, then a 15 per cent drop in Earnings and a 15XFY13 Earnings could result into a 20 per cent fall of the Sensex to 14000.