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 The 197 points decline in Nifty on January 8 despite marginal buying by both FIIs and DIIs indicates strong build up of short positions in the market, said V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Long positions are steadily declining and short positions are building up. This short build up is on bearish expectations that the present high valuations are difficult to sustain and some triggers may lead to sharp corrections, he said.

This expectation need not be realised since global cues have again turned positive on a rally in the US market. Domestic cues are looking good. Buy on dips strategy may work again leading to some short covering, he said.

Strong JLR numbers from Tata Motors and the attractive buy back offer from Bajaj Auto will give support to the Nifty Auto Index. The real estate segment is doing well and the margin expansion happening in the industry bodes well for the sector. But the good news is in the price, he said.

BSE Sensex is up 548 points at 71,903 points on Tuesday led by IT stocks. Tata Motors is up 2 per cent. HCL Tech is up 1.5 per cent.