Ashwini Agarwal, co-founder and Partner at Ashmore Investment Management, is of the view that there is a reasonable amount of euphoria in equity markets across the world and especially in emerging markets (EMs).

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"The euphoria in EMs could also be because the economic data shows that US and UK shows are slowing and investors who were underexposed to EMs could now be finding EM valuations attractive. So one is likely to see a rebalancing in trade", said Agarwal in an interview to CNBC-TV18.

“We continue to be reasonably positive on EMs, especially the domestic demand-driven EMs across the board,” he said.

When asked how one should approach the current rally seen in Indian equity markets, Agarwal said, "Investors should ensure that what they own, what appeals to them in terms of valuations or the underlying story and not blindly chase the market."

Talking about the current gains in the Indian stocks, Agarwal said, "The rally could be both because of global tailwind and a pre-election rally. Post the border tensions there seems to be tailwind behind the ruling BJP party and the market is hoping for a stable government led by one large party."

"Moreover, since the positioning of local investors has been relatively weak so far but as confidences build up looking at markets elsewhere in the world and looking at politics ahead, investors are encouraged to put in some money into equities and so this could well turn out to be a pre-election rally," said Agarwal.