FIIs cut short bets in Nifty futures to 5:1; net buy Rs 5,353 cr in F&O

DIIs, retail and proprietary traders continue to hold bullish bets in index futures, shows NSE derivative data. Technically, Nifty near support rises to 23,630.

Amid the sharp 1.6 per cent rally in the NSE Nifty, foreign institutional investors (FIIs) reduced their short positions in index futures on Tuesday. The NSE Nifty 50 index rallied to 23,739 in-line with a recovery in global markets after Donald Trump decided to 'pause' hike in tariff on Canada-Mexico by a month.  Since the start of the month, the US President Donald Trump imposed a 25 per cent tariff on Canada-Mexico, and 10 per cent duty on goods from China. In a retaliatory move, China too has sanctioned tariff hikes up to 15 per cent on select US imports.  On the bourses on Tuesday, technically, the Nifty formed a big green candle of daily scale, indicating strength. Furthermore, the index crossed the barrier of 23,630 - 23,640 and remained above it, indicating fresh buying interest, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.    On the upside, 23,750 - 23,800 will act as an immediate hurdle for the index, where the trend line resistance is placed. Sustaining above 23,800 unlocks the door for 24,000 - 24,200. As long as the Nifty holds 23,630, traders are advised to follow a buy-on-dips strategy, a note from the analyst read.  FIIs, DIIs, Retail trading action in F&O  According to data from the National Stock Exchange, FIIs net bought index futures to the tune of Rs 5,353.50 crore on Tuesday. They net purchased 30,713 contracts of index futures, primarily Nifty futures (26,750).  Pursuant to which, the FIIs long-short ratio in index futures dropped sharply from 8.5:1 to 5:1. This ratio now implies that FIIs hold 5 short positions in index futures for every long trade. As against the earlier ratio, wherein FIIs held 8.5 short bets in index futures.    Among the other key participants, domestic institutional investors (DIIs) long-short ratio in index futures stands at 1.15, retail investors at 2.52 and proprietary traders at 1.42 - all three categories seen holding bullish bets on index futures.  Nifty options hint at further gains  The Nifty options data reflects a moderately bullish undertone, as put writers maintain a subtle edge over call writers, indicating a shift in seller positions, explains Dhupesh Dhameja, Derivatives Analyst at SAMCO Securities.  The Nifty 24,000-call strike witnessed a sharp increase in open interest (1.56 crore contracts), reinforcing it as a strong resistance zone. Meanwhile, substantial put writing at the 23,000 strike (1.23 crore contracts) signals solid downside support.  Noteworthy put additions between 23,300 and 23,500 further solidify the support base, while call unwinding at higher strikes hints at a potential bullish repositioning. The Put-Call Ratio (PCR) ticked up to 0.94 from 0.74, suggesting growing bullish sentiment, while the 'max pain' level at 23,600 implies limited downside risk despite market swings, the analyst said in a note.