India Rally Shows Signs of Short Covering, Lacks Fresh Buying

Short covering was a key driver of India’s stock-market rebound on Wednesday, according to positioning data, pointing to a lack of conviction behind the biggest rally in almost a year.

The advance, aided by a US-Iran ceasefire, coincided with a sharp drop in futures positions. While similar patterns were seen across some Asian markets, the shift in India was more pronounced. Foreign investors reduced their short positions in index futures by 32,035 contracts — the biggest one-day decline since Feb. 3.