This rally was unexpected as the sentiment was largely negative and there were too many short sellers globally, when the US Fed made the statement that they had reached a neutral rate. We believe the market is not cheap at current levels, but if FIIs keep buying, markets will head higher. This rally now looks a bit stretched, but we can be wrong, if interest rates have reached the peak.
RBI: Govt to buy back bonds worth Rs 40,000 crore; move to ease tight liquidity
The unexpected move is also seen bringing down yields on short-term government bonds, as the three securities that the government has chosen to buy back