Foreign portfolio investors (FPIs) continued their buying spree on Monday, marking the third consecutive day of net purchases in the equity market. They invested a substantial ₹3,055.76 crore, demonstrating confidence in the Indian stock market. This trend comes amidst a flurry of trading activities, with FPIs engaging actively in both index futures and stock futures, while offloading some index options.
FPI Activity in the Cash Market
In the cash market, the FPIs’ purchases reached ₹3,055.76 crore. After a brief period of inactivity, domestic institutional investors also joined the buying wave, acquiring equities worth ₹98.5 crore. According to the provisional data released by the National Stock Exchange, this renewed interest reflects a positive sentiment among local investors.
Futures and Options Insights
As the March 27 expiry approaches, open interest in the derivatives segment has climbed for foreign institutional investors in Nifty futures. The long-to-short ratio for these index futures stands at a noteworthy 32:68. Specifically, FPIs made net purchases in:
- Index futures: Approx. ₹341 crore
- Stock futures: Approx. ₹942 crore
- Stock options: Approx. ₹1,831.1 crore
Conversely, they have been net sellers of index options, offloading positions worth an impressive ₹19,312.6 crore.
Nifty Futures and Market Dynamics
The overall open interest for Nifty 50 futures experienced a decrease, falling by ₹5,126.8 crore to settle at ₹30,635.3 crore by the close of the March expiry. The Nifty March futures saw a rise of 1.45%, reaching 23,699.35, with an open interest decline of 9.94%. The distribution of open interest indicates that the 25,000 call strikes have seen the most activity, while the 22,500 put strikes hold the maximum open interest.
Long-Short Ratio Trends
Interestingly, the total long-short ratio for foreign investors has dipped to 1.32, down from 1.40, signaling a slight shift in trading strategies. This adjustment could reflect changing market dynamics as investors recalibrate their positions in response to current market conditions.
Conclusion
As FPIs maintain their buying momentum, the Indian stock market appears to be on a positive trajectory. With significant investments and an active derivatives segment, the outlook for both domestic and foreign investors remains optimistic. Keep an eye on upcoming market trends and how these dynamics evolve as we approach the end of March.
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