Foreign Investors Cut Bank Nifty Shorts Ahead of RBI Policy

Foreign investors had bet that bank shares might fall, but they have recently reduced some of those bets.

This is called covering short positions, and it can help prices rise when investors buy back what they sold.

The Reserve Bank of India was expected to raise its key lending rate by a small amount on Wednesday.

Investors had mostly expected this move already, so they were watching for anything surprising.

Bank shares had fallen earlier but then began to recover.

Experts said improving credit growth and available funds could help banks.

They also said the outlook could change if the RBI decision surprises markets or international tensions worsen.

The article says investors were also reducing short positions in broader stock index futures.