While emerging markets continue to excite Franklin Templeton's Mark Mobius, India does not figure in his list of favourites because of valuation concerns though China remains on his list as do speaks of Korea, South Africa, Turkey and Brazil.

"Right now it would be Korea to begin, then China. Now when I say China, I'm talking about the shares in Hong Kong moving up at a nice pace. South Africa, Turkey would be the top markets right now," he the investment specialist and fund manager told CNBC-TV18.

"And then maybe I'd throw in Brazil. There's a little uncertainty there, but regardless of who gets elected in Brazil, the situation looks good because it is moving ahead with. He also added that from a global perspective the best returns in the last three months have come from Turkey, Brazil and Russia.

"The best returns have been achieved by Turkey, Brazil and it depends on what stocks you have, but Russia's been very good as well."

On the Sensex hitting a new high this morning, Mobius said that he had not expected a new high for the Indian market so soon and further said that with the average India P/E at 16x, one needs to be cautious.

However Mobius said, "It's a wonderful event that the Sensex is reaching news highs because that's good news not only for India but also for all emerging markets.

Asked if he was surprised that so much money continues to come into this country, which continues to outperform other relatively seemingly cheaper emerging markets, he said' "No, it is not a surprise when one sees the very rapid growth that India is now experiencing."

He said, "Also, it is not surprising because of the momentum that's been building up in the market, meaning that it is quite possible for the Index to move up to very high levels.But at the same time, the valuations are expensive relative to other countries around the world. So caution is necessary in such cases.

Mobius also said that if the multiples come down as result of higher earnings, then many fund managers will have to rethink in terms of re-allocation to this market, purely because of the sort of returns its delivering. "Certainly, there must be a re-assessment but right now the average price to earning ratio for India is about 16 times." He said.

He added, "So we have to be careful because that is pretty high compared to places like Japan, which is at 17 times and the US, which is at 14-14.5. So we have to be cautious now and there is no question the high growth rate in India is a very positive factor and could result in revision of earnings but it remains to be seen."