| Analysts and brokers are of the opinion that since the stock markets are already overvalued, the risk to markets outweighs the potential returns. In the past four trading sessions, the Sensex has lost 314 points. Today the index ended at 8484, down 8 points from Friday's close. |
| The present corrective phase is evincing mixed reactions from market players. Investors are keeping their fingers crossed, waiting for the second quarterly results which would determine the fate of the Sensex. |
| "We still feel that the markets are overvalued and would prefer it to come down to reasonable levels. The Sensex should find its support level at 8,000. The markets are expected to stabilise after the festive season," says M Ramalingam, CEO, ISE Securities and Services Ltd. |
| The markets will be primarily driven by fund flows from foreign investors as no other significant triggers are seen. "The Sensex has run up marginally ahead of its fundamentals and the short-term correction is quite healthy," said Jigar Shah, vice-president at KRChoksey. |
| Ambareesh Baliga, vice-president, Karvy Stock Broking, said, "The Sensex will find a good support level at 8,430 which may sustain for a day or two if the quarterly results of companies such as Infosys and TCS meet the market expectations." |
| However, if index heavyweights post disappointing numbers, the Sensex could further slide to the 8,100 levels as early as tomorrow, he said. |
| According to Baliga, the markets have been overvalued since the Sensex crossed 7,200 but the rise has been driven by liquidity.Gagan Banga, executive director, Indiabulls, however, has a different take on the Sensex valuation. |
| "I don't think it is overvalued," says he. He prefers to wait and watch the second quarterly results and FII inflows during the coming week before commenting further. |
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