The market surprised everyone with a sharp rebound yesterday, even as investors and speculators were expecting the indices to fall further after yesterday’s decline. Nifty futures closed the day with a hefty premium to the spot index as bear operators rushed to cover their short positions above the 3,000-level.
FIIs net buy Rs 1,020 cr in Nifty Futures yesterday, it seems like more of short covering by FII rather than fresh buying at this moment.
US stocks fell for the second day on Thursday after Standard & Poor's threatened to strip General Electric of its 'AAA' credit rating and slumping oil prices crippled energy shares. The Dow Jones Industrial Average tumbled 219.35 points, or 2.49 per cent, to end at 8,604.99.
Meanwhile, Asian stocks were trading on a mixed note ahead of a decision on interest rates by the Bank of Japan and fall in oil prices. Oil prices dropped more than 9 per cent to $36 a barrel on Thursday as slumping demand and swelling US inventories offset OPEC's record supply cut agreement.
Indian shares are expected to start lower today in line with weak Asian markets, but could bounce back & close flat in later trade on mounting expectations for rate cuts after inflation dropped to its lowest in nine months.
Sandeep Jain, Associate, HBJ Capital
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