India’s stocks and related exchange traded funds have been among the better performers in the emerging markets space. However, India’s inability to maintain positive momentum in light of optimistic fundamentals has some on edge.

Over the past year, the WisdomTree India Earnings Fund (NYSEArca: EPI) rose 30.3%, iShares India 50 ETF (NasdaqGM: INDY) gained 29.4% and PowerShares India Portfolio (NYSEArca: PIN) increased 28.7%.

However, over the past month, EPI fell 3.8%, INDY declined 3.8% and PIN decreased 1.3%.

Due to the recent weakness, J.P. Morgan’s technicians have grown concerned over the emerging market, arguing that India’s stock market has not held onto its recent highs, despite more positive news from the market, reports Shuli Ren for Barron’s.

For instance, the Reserve Bank of India earlier this month surprised markets with a 0.25% cut to its bench mark rates. While India’s market popped following the announcement, the benchmark index was unable to hold onto the gains.

Additionally, on March 12, Prime Minister Narendra Modi passed the first reform bill, allowing foreigners to invest up to 49% in India’s insurance companies from 26%. On March 19, the Federal Reserve Bank turned dovish on its policy rate forecast. Last Friday, India’s parliament passed the mine and coal reform bills.

Consequently, the recent pullback may be due to some good old fashioned profit taking and market re-evaluation as Indian stocks are looking expensive without further earnings support.

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