Dalal Street is expected to witness consolidation this week, following the completion of corporate results and improvement in global situation, analysts say.

"Market sentiments are definitely looking better than earlier but are overbought at present and they need to cool down a bit. Market are likely to consolidate this week before taking any direction," domestic brokerage firm SMC Global Vice President Rajesh Jain said.

The market gained substantially in the past week with the 30-share benchmark BSE Sensex adding over 300 points to close at 17,600 on Friday last week, while S&P CNX Nifty ended up 62 points at 5,228.20.

Corporate India has posted decent quarterly results and even the major IT sector firms performed mostly in line with street expectations.

Despite the domestic markets beginning to look up, foreign institutional investors' contribution in buying equities remained negative in 2008 so far as they have made net sale of Rs 10,442.70 crore in equities.

However, mutual funds' record in purchasing equities was a bit better in April as they made gross purchases of shares worth Rs 12,600.30 crore and sold to the value of Rs 12,439 crore, reflecting a net investment of mere Rs 160.70 crore.

Analysts believe that as the valuations have already touched near bottom levels, any negative news would get discounted by the market. For example the surge in inflation last week to a 42-month high of 7.57 per cent did not impact the market sentiments at all.

However, inflation remains the biggest concern for the government and marketmen said that measures taken by the Union government to control inflation have also added to uncertainty on corporate profit.