Economic Times- With stock prices in a free fall, India-obsessed hedge funds that were pushing up the market to dizzying levels are now looking to benefit from the slide by going short on India.
Many of them are said to be doing so by borrowing shares from foreign institutional investors (FIIs) allowed to issue participatory notes, and then dumping those shares in the market. So far in 2008, FIIs have net sold $6.5 billion worth of shares, and a sizeable portion of those sales are believed to have been punched in by hedge funds.
Market observers are not sure if the recent bout of sales by hedge funds is a result of redemption pressure or arising from a certain market strategy.
