New Delhi, Aug 30: The Reserve Bank of India cautioned on Thursday any further defaults in the US housing loan market — a crisis, which had caused domestic stock markets to crash earlier this month —could hit India hard, Press Trust of India said.

“Further deterioration in sub-prime delinquencies (in the United States) could lead to reassessment of risk by investors across products and markets and retrenchment of capital from emerging market economies (EMEs),” PTI quoted India’s apex bank as saying in its annual report for 2006-07.

“In particular, global financial market could turn volatile with attendant implications for EMEs like India,” the RBI report said.