Rally Likely to be Extended

Rally Likely to be Extended D P Sharma THE stock market scene has undergone a profound change over the past few weeks. The market which presented a picture of unrelieved gloom seeking new lows week after week till the end of the first week of August has staged an impressive recovery. From a low of 2529.6 on August 6 the BSE sensitive index rose to a high of 3053.1 on August 24 and the National index moved up from 1152.1 to 1345.2. In a matter of just 11 trading sessions, the sensitive index registered a rise of 20.7 per cent, retracing 26 per cent of the decline from its all-time high of 4546.3 (April 2). The national index rose by 16.8 per cent, retracing 21.7 per cent of the preceding fall. (For details see the accompanying table.) It is worth noting that the current rally has carried the BSE indices back to the levels where they stood at the end of May In other words, the market has retraced the entire decline since the beginning of June till August 6. If the extent of recoupment of ground lost during the fall from the April high looks rather modest it is because the preceding decline had been so steep