Mkt may not have played out correction

But fundamentals remain strong, say analysts.

After Black Friday, which saw a 542-point crash in the Bombay Stock Exchange Sensex, market analysts have said there could be further sell-off this week in Asian markets including India, triggered by the fall in the Dow Jones index on Friday.

The US markets fell despite latest economic growth data being better than expectation.

In spite of softening prices, most analysts maintained that the fundamentals of the Indian market remained strong, though it was ripe for a healthy correction on account of weak global sentiments.

The fall, they said, was a good opportunity for investors to enter the market as the valuations of some "overstretched" stocks have come down considerably.

Some analysts felt that the better-than-expected first quarter numbers announced by Reliance Industries Ltd on Saturday could bring some stability to the market on Monday, though the Sensex could dip another 500 points if the global sell-off were to continue unabated.

"Significant support is felt in the range of 14,550 to 14,750," Vidhur Pendharkar, head of technical analysis, Religare Securities, said.

Some technical analysts saw the immediate support level for the Sensex at around 15,100 points at the end of last week, but said that if the index broke below this level, it could find support at the 14,350 level.

These analysts also said that sectors such as real estate and construction could suffer a bigger dent in the falling market.

Meanwhile, Indian companies continued their good results season on Saturday. Reliance Industries, the country's largest private enterprise, reported 28 per cent growth in net profit for the first quarter of 2007-08, while State Bank of India, the country's top lender, saw its quarterly profits surging 78 per cent on account of increased lending.

"We see the long-term India story intact and suggest that the investor should start investing at these levels," said India Infoline Chairman Nirmal Jain.

"The long-term outlook remains good for Indian markets but in the short term, some sectors will see re-rating," added Enam Financial Consultants Chairman Vallabh Bhanshali.

On an average, Indian companies have reported earnings growth of around 20 per cent for the quarter ended 30 June and the 30-stock Sensex is trading at a price-earnings multiple of around 21.40.

Companies in the US too have reported robust earnings growth of around 15 per cent for the quarter. But, the sale of new homes in the US is going down and investors are not willing to finance big takeover deals. This has generated fears that the world's biggest economy is slowing down.