Indian stock markets have declined a lot during the last 10 months and capitalists have lost faith in the equities. But the golden rule of investing still remains unbroken, that in the long run companies with well-built fundamentals and talented management will always provide handsome returns.

The existing negative reaction has taken the rate of many shares much below their fair value. These shares cannot stay at such low levels and are expected to bounce back to somewhere closer to their fair value.

One can never expect, how the bourses will move in the short term of one week, month or a quarter, but capitalists can always be sure that when the reaction improves, companies with strong fundamentals are the first ones to move up significantly

Stock market analyst Vishwas Agarwal said, “With BSE below 9,780 level, I am in a cautious mood. On Tuesday FII selling, profit booking from traders and short selling were the cause of the fall, and this was also due to global market weakness. From this we can see that the Indian markets are following the global market trends rather than any new negative or positive development in India.”

Mr. Agarwal also said that the stock markets will behave erratically for some more period as panic and bad outlook among all sectors will keep market players watchful.

“I am not completely bearish but will take an opportunity call. Reliance gas case will decide the future of Reliance Industries, until then the scrip will be under pressure,” he added.

While discussing the market performance, Alex Mathew, head - research centre, Geojit Financial Services stated, “Crude is weak on account of increasing US crude inventories and weak worldwide prospective. If crude falls below $58, then we may see crude falling further. Indian currency is also weak because of dollar getting strength and weak equity markets.”

“For Nifty, the major support is at 2,855, below which we may see further selling. Best strategy is to reduce long and create hedge positions,” Mr. Mathew added.