Markets over-valued, should be near 8,800 level: Experts

Mumbai, June 10: The Indian stock markets which have been through a sea-saw like phase for about a fortnight, have led the experts form a view that the markets are at present over-valued and should ideally be around the 8,800 level.

A slump of 460 points, followed by a strong surge of 514 points to 9,810.14 yesterday at the Bombay Stock Exchange (BSE) Sensitive Index (Sensex) indicates the complex nature and the unpredictability of the stock markets, according to market experts.

At this juncture it is difficult to presume the stability of the markets, though given the performance of global markets, especially US and Japan - the epicentre of all major crash in stock prices around the globe - one can assume the Sensex will have to fight tooth-and-nail to cross the 10,000 mark when it opens on Monday, experts said.

The situation could marginally improve if the foreign institutional investors (FIIs) gain faith in the stability of the Indian market and help in quality buying.

The brighter side in all this negativity is the ranking by a global agency that India is the strongest emerging market in the world, primarily on account of the net FIIs' purchase of US dollar 733 million, which is the highest amongst all the emerging markets of the globe.

Besides, experts are of the opinion that the progress of monsoon to the coast of Orissa and later by June 20 to rest of India would up the prices of the major consumer durables, agricultuaral and farm sector scrips. Some positive trading is expected in this sector.

Also, the hike in interest rate by Reserve Bank of India (RBI) would affect the banking sector scrips.

ICICI has already increased the retail and corporate lending rates by 25 basis points and home loans would also be affected by the increase in interest rates, experts opined.

UNI