Street signs: Traders caught on wrong foot in Idea Cellular stock

Dabba trading in stocks, commodities and foreign exchange resumed after a gap of nearly two months

The surprise postponement of results by telecom operator Idea Cellular has caught traders on the wrong foot. Idea had announced that it would declare its December quarter results on January 23. On January 19, the company postponed its results without announcing the new date. 

“Many traders had built up short positions in the counter, anticipating weak numbers due to the impact of Reliance Jio and demonetisation. The trades had to be squared off, triggering a huge short-covering in the stock,” said a trader.      

                   

Samie Modak

Dabba trading resumes after two months 

Dabba trading in stocks, commodities and foreign exchange, has resumed after a gap of nearly two months. The illegal trading activity, which is settled in cash, had come to a grinding halt following the note ban in November. Market players say it has resumed in almost all the centres, as the cash situation has normalised. Maharashtra, Gujarat and Rajasthan are some of the key centres for such trading, which takes place in a close-knit group where traders avoid paying taxes.  

Rajesh Bhayani

Spike in market due to short covering?  

The three per cent rise in the market since January 20 has taken traders and fund managers by surprise, as there seems to be no apparent reason for the movement. “There has been a lot of short covering, especially from some hedge funds, which were caught shorting the market. A few big traders have trapped the short-sellers,” explains the chief executive of a brokerage. However, market players say that a large part of the short positions have now been covered, and the Street will wait for the Budget to take future calls.

Joydeep Ghosh