Over the course of the last week, Foreign Portfolio Investors – FPIs boosted their net long holdings in index futures significantly, indicating a bullish mood in the market. FPIs were 76% long in index futures as of Friday; on Monday, that position increased to almost 80%. FPIs now own a record 5.25 lakh long contracts, above the previous high of 5.13 lakh contracts set in July. Nuvama Alternative & Quantitative Research data shows that during the five days preceding Friday, FPIs added net long holdings valued at $1,366 million.
According to Motilal Oswal Financial Services derivatives analyst Chandan Taparia, FPIs covered their short positions on Friday in addition to adding long ones, indicating strong market momentum. “It is evident that FPIs are skewed longer with higher tops and higher bottoms. The Nifty might rise to 26,250–26,500, with firm support at 25,500, according to the growing put-call ratio, he said.
As high as 86–88 percent in the past, FPIs have held long positions. AVP of Derivative Research at JM Financial Services Soni Patnaik thinks this suggests there is still space for the Nifty and Nifty Bank to rise. Nevertheless, she issued a warning, indicating a constrained upward, saying the Nifty would encounter resistance above 26,200. Though 25,500 ought to serve as a strong support, profit-booking may occur if FPI long positions fall below 65%. In contrast, Bank Nifty might see a further 500–600 point rally during this September series, the speaker continued.
Experts have also emphasized how the recent upward trend in the Nifty Bank is partly attributable to HDFC Bank’s outstanding performance. Nifty could rise or fall by 600–800 points, although a large decline seems improbable. Nifty might recover to 24,000 in a correction, but domestic mutual funds, loaded with cash, will probably intervene at any decline to stop a more significant loss, according to Rahul Ghose, CEO of Hedged.in.
Senior Analyst at Angel One Osho Krishan suggests exercising care because derivative and technical indicators are now in overbought condition. He stated, “In this environment, securing profits at regular intervals is a smart strategy rather than being complacent.”
FPIs bought shares worth ₹14,000 crore on Friday in the cash market; FTSE’s semi-annual rebalancing was a major factor in these inflows, which totaled between ₹7,000 and 8,000 crore. After recording advances in three straight sessions, Nifty closed at 25,939 on Monday.
Leave a Reply