Indian Markets looking over-priced: Nirmal Bang Securities

SensexPresident Barack Obama offered stern words for Wall Street and a prediction of 10 % U. S. unemployment even as he said the "engines" of an economic recovery have begun to turn. Obama voiced confidence the economy would recover soon, while warning that robust growth was needed if the U. S. is to rein in its budget deficit without raising taxes on most Americans. Obama pledged to make the derivatives market, which he called a system of "enormous risk," more transparent. He also said it is important for the U. S. to maintain fiscal discipline to ensure investors in China and around the world keep buying U. S. government debt.

U. S. stocks fell, sending the Standard & Poor's 500 Index to its biggest two? day tumble since April, as Best Buy Co. posted disappointing sales and commodity producers sank on concern the economic recovery is stalling. Stocks rose in early trading as a better? thanestimated report on housing starts spurred a rally in homebuilders and commodity shares climbed with metal and oil prices. Benchmark indexes and commodities turned lower after Reuters reported that New York University economist Nouriel Roubini, who predicted the financial crisis, told a conference the economy won't recover until the end of the year and growth will remain weak.

Morgan Stanley said the rally in U. S. stocks may be finished after the brokerage raised its end? of? year target for the S&P 500 to 900 from
825, still 2.6 % below yesterday's close. "Having breached the 950 level, the rally may now be over," Goldman Sachs Group Inc. chief economist Jim O'Neill said financial markets may weaken in coming weeks amid concern about governments' intentions on rolling backing stimulus packages.

"I wouldn't be surprised if what started yesterday is the beginning of a correction that goes on a few weeks," O'Neill said in an interview today in Monaco. A so? called correction is typically defined as a 10 % drop from a peak.

Asian commodity stocks declined, overshadowing gains in the region by Japanese real estate companies and automakers.

The yen traded near a two? week high against the euro and the dollar as waning optimism over the pace of the U. S. economic recovery spurred demand for safer assets. Risk? money is beginning to shift back into safe? haven currencies and assets, moving away from higheryielding ones.

Today Indian stock markets are expected to open weak and may continue to remain weak.