India’s economy has not escaped the global downturn. But growth is still much higher than the developed world. Aggressive rate cuts and a fast-growing service sector will help revive the economy. Mike Caggeso picks two deeply undervalued Indian companies with a strong potential for profits.

Major domestic sales declines from Toyota Motor Corp. (ADR: TM) and Nissan Motor Corp. (ADR: NSANY) led Japan to post its worst overall annual vehicle sales in nearly three decades.

India started the year on an actionable note by sharply cutting interest rates and unveiling another stimulus package. The Reserve Bank of India lowered its repurchase rate by one percentage point to 5.5%, and lowered the reverse-repurchase rate by one percentage point to 4%.

Falling sales and rising foreclosures has chopped 18% from home prices in 20 major U.S. cities from Oct. 2007 to Oct. 2008, the fastest rate on record.

Emerging markets investors have always had famed investor Jim Rogers on their side. Now – after the bubbles of China, India, Latin America and more have popped – they can take comfort in the word of investor Mark Mobius, who said emerging markets are “bottoming” en route to a bull phase in 2009.

Gold hit two historic milestones in 2008. First, in early March, the “yellow metal” hit its all-time high of $1,030 an ounce. Just three months later, the price of gold for December delivery had plummeted to $681 an ounce, a 21-month low and 33.9% drop from its record high. Most gold bugs were equal parts puzzled and broken-hearted.

While most companies are bracing themselves for difficult times in 2009, Yum! Brands Inc. (NYSE:YUM) is aggressively expanding its international operations. The fast food group has China at the core of its growth strategy for 2009. Mike Caggeso says this could make Yum! one of the most promising investment stories in the coming year.

Panasonic Corp. (ADR:PC) said today (Friday) that it will spend up to $9 billion to acquire majority stake in rival Sanyo Electric Co. Ltd. (OTC:SANYY).

A price tag has emerged for President-elect Barack Obama’s infrastructure stimulus, $850 billion, according to one of his advisers. His team calculates the figure is necessary to create 2.5 million jobs, improve an array of infrastructure projects, and bolster unemployment, health-care, and renewable energy programs, lawmakers told Bloomberg.

As expected, U.S. Federal Reserve policymakers slashed a benchmark interest rate yesterday (Tuesday). But they cut it by a bigger-than-expected amount, and did so in an unconventional manner.