Investors are set to witness the Bombay Stock Exchange's benchmark 30-share idex, the Sensex, hitting the 15,000 point level amid cautions upon pricey valuations of Indian stocks.

However, Indian securities markets, at present levels, are fairly valued, while its competitors from the emerging world such as Brazil and China are witnessing overstretched valuations, global investment outlook for July by ICICI Bank's private banking research division has said. By 2007 end, the Indian markets should not be very high from their current levels.

Indian equity markets are trading at price-earnings (P/E) ratio of around 18 times FY08 earning.

"We are of view that 2007 could be year of the stock markets. Equity markets could consolidate at current levels and witness some corrections in short to medium term. At current levels, the markets seems to have discounted the FY08 earnings and any negative news on the earnings front could trigger a correction in the respective sector," it said while attributing rising current account deficit, reforms backlog and demand slowdown in the developed economies as major risk factors.

"Equities remain an attractive avenue over the long term on the backdrop of robust economic growth. Investors are advised to stick to their risk profiles and not get swayed by short term market volatility," it added.

The Sensex is nearing its all-time levels. On June 29, it was short of two points to 14,650, against its all time high of 14,652.09 points. The index, which has been range bound in recent times, has grown nearly 18% in the last three months.

The report rated Chinese shares as most expensive, as the stocks are sitting over a P/E ratio of 50, and average of over 37 in recent times, which is quite higher than other markets.

Despite rating the Brazilian markets overvalued than other markets, the report said, "Excluding currency, political and other shocks, Brazil's equity markets may lave less downside risk, but its upside potential versus the others, in our view, may be limited by some current fiscal and monetary restraints."

It also warned investors in Latin American of political risks, following radical policies employed by Brazil's neighbouring countries. Brazilian markets have given upto 36% returns in the last quarter.