Short covering by FPIs boosted indices in July
Historically, the benchmark index made a trough whenever the long-short ratio dropped to 0.2-0.3. In the past five years, there were only 19 such instances out of total trading days of 1417.
ET Intelligence Group: The benchmark indices gained nearly 8% in July even as the buying by local funds was at a nine-month low and though foreign portfolio investors (FPIs) turned net buyers during the month, their net purchase was just around Rs 5,000 crore.
So what was the reason behind the best monthly gain in 11 months?
The data from Bloomberg on derivative positions reveals that short covering by FPIs offered major support to the
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