Foreign portfolio investors (FPIs) continued their buying spree in the Indian equity market, purchasing shares worth a remarkable ₹5,371.57 crore on Tuesday. This marks the fourth consecutive session where FPIs have emerged as net buyers, actively engaging in index futures, index options, and stock futures. However, they shifted gears in the stock options market, becoming net sellers.

Cash Market Dynamics

In the latest data from the National Stock Exchange, domestic institutional investors (DIIs) switched their stance to net sellers, offloading equities valued at ₹2,768.87 crore after a brief buying phase. This shift indicates a potential change in market sentiment among local investors, contrasting with the growing confidence shown by foreign investors.

Futures and Options Activity

As the March 27 expiry approaches, the open interest in the derivatives segment has seen notable changes. FPIs increased their positions in Nifty futures, with a long-to-short ratio standing at 32:68. They invested approximately ₹919.76 crore in index futures and ₹25,766.06 crore in index options, alongside ₹1,843.22 crore in stock futures. Conversely, they sold stock options worth ₹911.62 crore, showcasing a strategic adjustment in their trading approach.

• FPI Investments Summary:
  • Index Futures: ₹919.76 crore (Buy)
  • Index Options: ₹25,766.06 crore (Buy)
  • Stock Futures: ₹1,843.22 crore (Buy)
  • Stock Options: ₹911.62 crore (Sell)

Market Sentiment and Open Interest

The total open interest for Nifty 50 futures saw a decline of ₹3,022.4 crore, dropping from ₹30,635.3 crore to ₹27,612.9 crore as the March expiry nears. The Nifty futures were trading at 23,705.35, down 0.14%, with a premium of 36.7 points and open interest decreasing by 9.94%. Current trends indicate significant activity at the 25,000 call strikes, while the 23,000 put strikes have registered the highest open interest.

Long-Short Ratio Insights

The long-short ratio among foreign investors has increased slightly, moving from 1.32 to 1.34, suggesting a cautious optimism about future market movements. This change reflects a growing interest in maintaining positions amidst a fluctuating market landscape.

Overall, the Indian equity market continues to show resilience, with FPIs leading the charge as net buyers, while domestic players recalibrate their strategies. As the market evolves, investors will be keen to observe how these trends develop, particularly in light of upcoming expiries and broader economic indicators.