Foreign portfolio investors (FPIs) remained net sellers of Indian equities for the eleventh consecutive session on Friday, offloading stocks worth ₹3,318.1 crore. Their selling activities extended beyond equities, as they were also net sellers in index options, futures, and stock options, reflecting a broad pullback from the Indian market.
Persistent Selling in Cash Market
According to provisional data from the National Stock Exchange (NSE), domestic institutional investors (DIIs) have been consistently buying for 22 straight sessions, purchasing stocks worth ₹2,572.9 crore. However, the ongoing FPI selling has raised concerns about foreign investor sentiment. In total, FPIs have divested ₹44,396 crore in Indian equities this month alone, based on data from the National Securities Depository Ltd. (NSDL). On January 16, FPIs offloaded ₹4,416.02 crore in stock exchanges, signaling a continued exit from the market.
FPI Activity in Futures and Options
Ahead of the January 25 expiry, FPIs increased their open positions in Nifty futures. The long-to-short ratio for FPIs in index futures stood at 15:85, indicating a predominantly bearish outlook. In the derivatives segment, FPIs sold index futures valued at ₹2,406.59 crore and index options worth ₹13,994.8 crore. Additionally, they sold stock futures and options totaling ₹845.07 crore and ₹844.96 crore, respectively.
Nifty Futures Open Interest
As the expiry approaches, the total open interest in Nifty 50 futures rose by ₹1,087.21 crore, increasing from ₹31,561.67 crore to ₹32,648.88 crore. This uptick suggests rising investor activity and anticipation in the futures market.
F&O Insights and Long-Short Ratios
Nifty January futures were down by 0.50% to 23,261.75, with a premium of 58.55 points, and open interest saw an increase of 3.94%. Open interest distribution for the Nifty 50 January 23 expiry indicated significant activity at the 24,000 call strike, while the 22,000 put strike had the maximum open interest.
Furthermore, the overall long-short ratio for foreign investors decreased to 1.22 from 1.28 in the previous session, signaling a reduction in bullish positions.
The data underscores a continuing cautious approach by FPIs, with their overall market sentiment remaining bearish as they pull back from Indian equities and derivatives.
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