EXTERNAL DESTABILIZATION - EARLY WARNINGS

The money, foreign exchange and capital markets have witnessed skirmis hes, reflecting the south-east Asian turmoil. While the general impres sion that Indian markets are by and large insulated from external turm oil is valid, there is no gainsaying that both the stock markets and t he exchange rate are under pressure. This is largely because of poor d omestic fundamentals, but partly also because of poor domestic fundame ntals, but partly also because of the destabilising effects of the lib eralisation process.