Sensex rebound has ifs and buts
The Sensex has gained 23 pc over the past 12 trading days — the sharpest since last Sept. But experts say it is too early to celebrate that as the beginning of a recovery or the bull run that crashed out. Sandeep Singh reports.business Updated: Mar 27, 2009 22:34 IST
The Sensex has gained 23 per cent over the past 12 trading days, and 12 per cent of that in just one week—the sharpest since last September. But experts say it is too early to celebrate that as the beginning of a recovery or the bull run that crashed out.
“It is very difficult to distinguish between a bear market rally and the beginning of a bull run and therefore to classify this run as either of them is also not possible,” said Sanjay Sinha, CEO, DBS Cholamandalam Aseet Management Company.
Some attribute the steep gains to the covering up of existing short positions by market players who had expected the market to fall further.
“There is a cautious optimism in the market which has resulted into covering up of the huge short selling positions,” said Aseem Dhru, CEO, HDFC Securities. “The larger set of trend reversal has not yet appeared and the markets will try to consolidate at these levels.”
Optimism has built up over the past one month as not much new bad news has come in from the West’s financial sector, while Washington’s $1 trillion stimulus package to clean up ailing banks has been a big booster for stocks.
Experts feel US housing numbers and unemployment figures are better than anticipate.
“While they suggest optimism is coming back to the system, they need to be sustainable for which fundamentals will have to improve further,” said Sinha.
Much hammered Indian sectors are now better. The BSE metal index gained 31 per cent since March 9, while the Bankex (banking), Oil and gas and Realty indices gained 30 per cent, 28 per cent and 24 per cent, respectively.