Bear traders in India’s equity markets were battered on Wednesday as the CNX Bank Nifty index of the National Stock Exchange (NSE) and PSU bank stocks witnessed one of their biggest short squeezes in years. A massive covering of short positions was seen from foreign portfolio investors (FPIs), mainly hedge and index funds, market experts said.
A stunning swing in sentiment in respect of PSU banks following the government announcement on Tuesday of a ₹2.11-lakh crore bank recapitalisation package sent the share prices of SBI, PNB, Canara Bank, Bank of Baroda and Union Bank, among others, up by 25-50 per cent in a single trading session. Brokers said there had not been such an upmove in PSU banks shares in years. The Bank Nifty index rose 3.36 per cent and the PSU Bank index 29.63 per cent.
