Foreign Investors’ Big Market Move: A Change in the Indian Stock Market
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from India’s financial markets! In a surprising turn of events, foreign portfolio investors (FPIs), who had been continuously selling Indian equities for 23 sessions, became net buyers on Tuesday. This isbreaking news
with major implications for the Indian economy.FPIs Snap 23-Day Selling Spree
This shift marks a significant change. FPIs purchased stocks worth approximately Rs 809.2 crore on Tuesday. This reversed a trend that saw them offload a massive Rs 81,656 crore worth of equities since January 2nd. This significant buying spree is a welcome change for the Indian [[market]].
Domestic Investors Take a Different Path
While foreign investors embraced the
market
, domestic institutional investors (DIIs) took a different route. After 34 straight days of buying, they sold equities worth Rs 430.7 crore on Tuesday. This shows a divergence in the investment strategies of domestic and foreign players.Activity in Futures and Options Markets
The activity wasn’t limited to the cash market. FPIs also displayed significant activity in the derivatives segment. They were net buyers of index futures and options, buying Rs 5,353.5 crore and Rs 9,022.94 crore worth, respectively. They also bought stock futures worth Rs 7,473.73 crore but sold stock options worth Rs 1,990.92 crore. This shows a complex trading strategy by [[FPIs]].
Analyzing Open Interest in Nifty Futures
The open interest in Nifty futures, representing outstanding positions, increased for FPIs before the February 27 expiry. Their long-to-short ratio in index futures remained at 16%:84%. The total value of Nifty 50 futures open interest slightly decreased by Rs 431.62 crore at the end of the February expiry.
Trade Setup and Outlook
Market analysts suggest a “buy on dips” strategy if the Nifty index holds certain levels. The Nifty February futures showed a premium, indicating a positive market sentiment. The open interest distribution suggests substantial activity around certain call and put strikes, indicating potential support and resistance levels. The overall long-short ratio for foreign investors increased to 1.18 from 1.14 in the previous session.
Impact and Significance
The change in FPI sentiment is a key indicator for the Indian