Recovery doubts

The stock market staged a rebound from its low levels in the past few days as investors resorted to bargain-hunting after a steep fall in share prices. But marketmen are still not sure about the genuineness and continuity of the recovery.

Though global markets have picked up last week, domestic issues like rising inflation and falling industrial production are likely to have their impact. “The plus points for the bulls are the falling crude oil prices and revival of FII inflows. I don’t see scope for a sustained rally… retail investors are keeping away from the market,” said a BSE dealer.

According to experts, the market is likely to witness lows volumes and high volatility. Some select stocks could see buying support.

The recent rebound on the bourses was part of the recovery across global emerging markets driven by a small 25 basis point US interest rate rise, which allayed fears of bigger hikes in future.

On November 1, 2005, the US Federal Reserve raised interest rates by 25 basis points to 4 per cent.