Valuations look attractive now: Experts

Despite the biggest weekly loss, market analysts expect a better week ahead as falling prices have made stocks very attractive, given that the quarterly results were not a complete letdown.

Though the third quarter numbers may not be as good as the previous quarters, biggies such as Reliance Industries registered a growth of 26 per cent and Infosys Technologies, rocked by the rupee's appreciation, managed to dock a 25 per cent rise in net profit thanks to tax writeback.

"The corporate results have been higher than global standards. The fall in the market is a result of sentiment," said an official at Khandwala Securities. Two IPOs "" Future Capital Holdings and Reliance Power "" that witnessed record subscriptions have further sucked liquidity from the system.

"Global cues are negative but that accompanied by a liquidity crunch is causing some pain in the market. The market had become euphoric, but at 18,000-18,500 levels there would be buyers in this market. From here onwards, we do not see a big downside," said Anurag Tripathi, EVP- Equities, Almondz Global Securities.

Market sources feel that valuations had run ahead of the earnings potential of Indian companies. This week's fall has brought "a healthy correction" to the market.

"This fall will act as a check on primary market and most probably valuations should soften up. There will be a pre-budget rally in February. Markets needed a sense of reality check and this kind of correction was needed to ensure healthy market. Corporate results have been generally bad and it has been priced into this correction phase," said Ramesh Damani, member, Bombay Stock Exchange.

Despite strong fundamentals, de-coupling has taken a backseat for now as sellers queue up at large cap, mid-cap and small cap counters alike.

"We cannot be immune to movements in global markets as we are a globally integrated market and have a huge amount of foreign capital invested in our markets. The decoupling story will play out in the long term, but in the short term we will have a high co-relation to global markets," said Balakrishnan Kunnambath, global market manager""Indian Subcontinent, SocieteGenerale Private Banking (Asia Pacific).