FIIs net buy Rs 11,586 cr worth index futures in 4 days amid short-covering

FIIs net bought 35,901 contracts of Nifty futures and 31,258 contracts of Bank Nifty in the last 4 days; DIIs bullish bets in index futures at highest in more than a year, shows NSE F&O data.

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The NSE Nifty 50 index has surged 3.5 per cent in the last four straight trading sessions supported by all-round buying. Analysts also attributed the recovery in the market to a sustained fall in the US Dollar index, which accounted for a lower intensity of selling by foreign investors and short-covering in the F&O market.  A consistent fall of the US dollar index has reduced the intensity of FII selling while DII buying continues to be strong, thus triggering the recent upside, said Vinod Nair, Head of Research at Geojit Financial Services in a note.  In the cash market, foreign institutional investors (FIIs) trading activity has been mixed in the last four trading sessions, with net sales of stocks worth Rs 879.85 crore, shows data from the stock exchanges.  ALSO READ | Stock Market LIVE Updates: GIFT Nifty shows muted open for India markets; Asia Pacific mixed  However, FIIs have been net buyers in the derivatives segment for the last four days, and net bought index futures worth Rs 11,586 crore, mainly on account of short-covering.  An analysis of the derivatives data show that FIIs long-short ratio in index futures stood at 0.23 as of March 13 - implying presence of nearly 5 short positions in index futures for every long trade. However, post the 4-day rally, this ratio has now risen to 0.42 - implying presence of more than 2 short bets for every long trade - thus indicating that FIIs have covered some of their short positions.   FIIs have net bought 35,901 contracts of Nifty futures in the last four days. Similarly, they net purchased 31,258 contracts of Bank Nifty and 5,338 contracts of MidCap Nifty futures in the same period.  Data reveals that correspondingly FIIs open interest (OI) in Nifty futures declined by 2.4 per cent, in Bank Nifty by 12.7 per cent and MidCap Nifty by 15 per cent. The overall OI in index futures was down by 7.4 per cent in the last 4 trading sessions.     ALSO READ | FIIs cut short bets in Nifty futures; analysts see further upside   Meanwhile, among other participants - retail investors’ long-short ratio in index futures has dropped to its lowest at 1.53 since December 11, 2024. Retail investors' now hold 3 long positions in index futures for every 2 short trades. At its peak, retail investors’ long-short ratio touched a high of 2.69 on February 27, 2025.  In contrast, DIIs (domestic institutional investors) long-short ratio in index futures is at highest in more than a year at 2.86 - this ratio implies presence of 3 long bets for every short trade. Whereas, proprietary traders' long-short ratio has dropped to 0.51 - implying 2 short positions for every long position as of March 20, 2025.