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No major reason to worry yet!

Published on Tue, Dec 19, 2006 at 14:00 | Source : Moneycontrol.com

Updated at Tue, Dec 19, 2006 at 16:17

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The markets have slipped quite a bit, keeping in line with Asian peers. Negative Asian cues have been pulling down our markets since the opening. Experts analyse the situation.

Rajen Shah of Angel Broking says that valuations are stretched at this point in time, and expects the market to consolidate from here on.

He senses that the Sensex will be range bound between 12800-14000 levels. He expects to see this kind of trend of the market rallying between these levels for the next 4-6 weeks.

However, on a more optimistic note he says that corporate earning for the next quarter will be in line with what was seen in the past two quarters.

Investment advisor PN Vijay says that this fall is not a cause for worry. "Globally markets have been a bit weak, starting from Tokyo in the morning - we are probably getting bit of the tailwind of that."

He says that there are some short positions being created by the bears who are seeking to bring the market down a bit more.

Analysts warn to watch out for shorting, as a recovery lead by shorting is dangerous.

While the long term India is still intact, Deven Choksey of KR Choksey Securities says that the market is clearly trying to establish direction ahead of the next quarter's results. "Probably because of vacation in December; I think people are staying little bit cautious and the market movement is a bit sideways."

"As of now profit booking at the higher levels and buying at the lower levels is expected to continue," he adds.

Rajesh Agarwal of CD Equisearch says today's slide was just a repercussion that arose from the US markets being down yesterday, and weak Asian markets. He also says that the rally seen over the past few days did not have much volume, and hence today's slip occurred.

In addition to the Thai situation, Vibhav Kapoor of IL&FS is of the opinion that this slide has come about as a combination of various factors. "The markets have been very volatile in the last one week to ten days which is indicating that at higher levels there is nervousness around. This is partly because of the stretched valuations and partly because of the weak IIP numbers we saw as well as increase in the CRR by the RBI."

By Crystal Barretto (with inputs from CNBC-TV18)