Today,suddenly the mood seems to change in the market. Just when one thought oil was reaching realistic levels, overnight we see it surge past US$130 in intra-day trading. Investment banks Morgan Stanley and Goldman Sachs have now got converted into traditional bank holding companies. Looks like the euphoria over the Bush regime's mega rescue plan for Wall Street seems to fading fast. That was quite evident in Monday's trading in our markets, where the key indices closed marginally in the red.
What sent the US markets tanking last night? A revision in rules for short selling, say some reports. The new rules say those engaged in bona-fide market making and hedging activity, including in derivative contracts, could continue to short.
This clears shows that the market is still pretty jittery and the rally on the previous two days was driven more by short-covering and the news flow from the US.
