Dalal street [Get Quote] is likely witness volatility and uncertainty in the next 18 months and markets may see a new high by the end of next year, Domestic brokerage firm Religare Securities said.

"In next 12 to 18 months we should see a lot of uncertainty being cleared, and might see a new high certainly in late 2009 or early 2010, when uncertainty in global market is diminished and domestic concerns like inflation and high interest rates come under control," Religare Securities President (equity) Amitabh Chakraborty said.

The Bombay Stock Exchange barometre has witnessed high volatility amid weak global cues so far and lost as much as 34 per cent from its all time high of 21,206.77 quoted on January 10.

If the current global market turmoil continues it would result in more number of job losses, which would in turn worsen the housing market.

However, policy response by the central banks and US treasury can bring back the confidence, Chakraborty said, adding that 'housing market according to me will take more than 6 months time to come out as the confidence remains low'.

The most critical level to watch out for at this point of time would be 12,500 for the Sensex and 3,600 for National Stock Exchange's index, Nifty.

"If we break below 12,500 then we can go below 10,000 may be to 9,200 to 9,500, and at that level we think some serious buying can take place. In Nifty term, 3,650 is a near term possibility, but with policy actions in the US and bullish global markets we will see 4,350 probably sooner than the downside," Chakraborty said.

• Investors in IPOs lost over Rs 50 billion in 2008