Worst is not yet over for Sensex

Worst is not yet over for stock markets and Sensex may plunge further, amid concerns lingering over the 2G spectrum row and political uncertainty, but investors can go for selective value buying, say analysts.

Deepened political crisis over the 2G spectrum row and banks' exposure to real estate and micro-finance saw the bellwether Sensex plummeting by 571.45 points or 2.83 per cent during the past week.

"Fundamentally, it is healthy that market has corrected to reasonable levels for fresh entry. Markets could continue a slide further but this would provide opportunity to enter on a selective basis, based on fundamentals," Unicon Financial Vice-President (PMS & Research) Madhumita Ghosh said.

Market experts also said that negative cues from China and Ireland played an important role in the last week's correction seen in the market and that in the coming week also, market may react to China's interest rake hike announced on Friday.

"One now has to see if FIIs continue to pull out money from India or will start buying at lower levels. One also has to closely follow the global cues," IIFL Head of Research Amar Ambani said.

However, the experts are calling the market fall a 'buying opportunity' for investors, but they also feel the steep fall over the past 10 days points to extremely negative sentiments prevailing in markets.

"Since the fall began from 21,000 levels 10 days ago, the index has not breached its previous day high. Hence a relief rally could open only if the index breaks above 20,000," Globe Capital Market Senior Research Analyst Nirav Vakharia said.

Global markets, too, were mixed yesterday. In Asia, Hong Kong's Hang Seng closed with a loss of 0.13 per cent, while China's Shanghai ended with a gain of 0.81 per cent.