“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.
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.
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.
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