Foreign Institutional Investors (FIIs) have been net sellers of Nifty futures for the last eight straight trading sessions, according to the NSE futures & options (F&O) data. This trend indicates a cautious-to-negative undertone in the market, with FIIs net selling 69,369 contracts of Nifty futures since April 30.
The NSE F&O data shows that FIIs have net sold index futures contracts, including Nifty and Bank Nifty, worth ₹10,254 crore in the last eight days. During this period, the NSE Nifty 50 index declined by 3.3 per cent.
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FII open interest (OI) in Nifty futures increased by 41 per cent to 2.28 lakh contracts, reflecting the growing uncertainty in the market. The Nifty Put-Call-Ratio (PCR) stands near 0.71, indicating a cautious-to-negative undertone, according to Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities.
Market analysts have flagged that the overall sentiment has now turned cautious, with risks of further losses mounting. Dhupesh Dhameja highlights that option data shows aggressive call writing around 23,800–24,000, capping immediate upside momentum, while put writing near 23,200–23,000 is acting as the nearest support base.
Nifty’s Volatile Corrective Phase
The Nifty has entered a volatile corrective phase, and as long as it sustains below the 20-DEMA and the 23,800 resistance zone, a sell-on-rise strategy remains favourable, according to Dhameja. A decisive follow-through below 23,320 could accelerate downside momentum towards 23,000–22,900.
Nandish Shah, Deputy Vice President at HDFC Securities, echoes a similar bearish sentiment, highlighting that technically, Nifty is now placed below its 10-, 20-, 50-, 100-, and 200-Day Exponential Moving Averages (DEMAs), signalling a broad-based bearish trend across multiple time frames.
The earlier support level of 23,800 is now expected to act as a resistance on any pullback, according to Shah. On the downside, he sees immediate support placed near 23,100, which coincides with the 61.8 per cent Fibonacci retracement of the prior up move from 22,182 to 24,601.
In the last two days, NSE F&O data shows that 4 stocks have seen a rise in Open Interest (OI) alongside a decline in underlying price. Dalmia Bharat and Kalyan Jewellers dipped 3 per cent and 12 per cent in the last two days, while the OI rose around 18 per cent for each of the stocks.
The Indian Energy Exchange (IEX) and Bharti Airtel witnessed up to 13 per cent and 12 per cent jump in OI, while the stocks slipped 6 per cent and 4 per cent, respectively. The views expressed by the brokerage/analyst in this article are their own and not those of the website or its management.
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