Sudden Rally Gets the Market on its Toes
Change is the only constant in the stock market and nowhere was this more evident than in the recent tactical bounce experienced by the NSE benchmark index Nifty 50. Just a week ago, sentiments were predicting a doomsday scenario for the markets. However, the positioning of foreign institutional investors (FIIs) and the surprise decision by the Reserve Bank of India’s Monetary Policy Committee (MPC) to keep repo rates unchanged sparked a sudden and furious rally in the markets. The FIIs had built up an extreme level of shorts in the system but sensing an improvement in global sentiment they were forced to cover their positions.