Nifty99000 100%

Sensex99000 100%


Will FIIs Remain Upbeat On Indian mkts

Author: Dasari Sreenivasa Rao/Wednesday, November 4, 2020/Categories: Exclusive

Rate this article:
No rating
Will FIIs Remain Upbeat On Indian mkts

After being net sellers since October 12, barring two sessions on October 19 and 21, foreign institutional investors (FIIs) turned positive in index futures on November 2. Overall, they bought equities worth Rs 15,400 crore in October. In the F&O space, activities were mixed on the FII front. While they sold worth Rs5,881 crore in index futures, they bought to the tune of Rs6,288 crore in the stock futures segment during the week ended October 30, 2020. FIIs bought index options worth Rs3,414 crore during the week ahead of the US Presidential elections. FPIs were net buyers since May, except September, as their net buying was Rs14,537.4 cr in October and net selling was Rs9,981.01 cr in September. After touching highest level of 83.61 on March 24, when nation-wide lockdown was announced, volatility index ‘India VIX’ has been rising from the low of 18.35 on August 28. India VIX is hovering at 24.92 level. 

After trading hours on Monday, the Put-Call Ratio of Open Interest (OI) for NSE Nifty was at 1.0135, while highest Call OI was at 12,500 strike and highest Put OI was at 11,500 strike. The US elections and lockdown in several European cities amid second wave of Covid-19 triggered a sell-off in risk assets last week. However, announcement of increased MSCI weight for India kept downsides limited, while the Nifty ended the October series below 11,700. The volatility across the global markets continued to rise and India VIX also rising towards 25 level. The Nifty exhibited extreme volatility along with weakness in global markets but was able to end the October series near its volume weighted average price (VWAP) level of 11,700.

FII trading in cash market was positive during the October series as they’re net buyers to the tune of Rs15,048 crore. However on the derivative side, FIIs seem to be chary of holding long going ahead of the important event of the US Elections and Bihar assembly elections, both of which are scheduled in November month. FIIs began the November series with net short in index futures of 12,000 contracts, however the quantum of their net short is not much and their long short ratio stands at 45 per cent. According to data on ICICI, while FIIs remained net buyers in Indian equities, the NSE Nifty remained largely range bound. The major inflow of Rs3,589 crore was seen on October 27 on expectations of increased weight of India in MSCI indices. However, they bought almost Rs3,478 crore in equities during the week. Domestic financial institutions (DIIs) were net sellers at higher levels and sold almost Rs3,694 crore in equities during the week. For October, net FII investment in equities has remained positive. They bought around Rs19,640 crore in equities and Rs1,641 crore in the debt markets.

Witnessing its fifth monthly rise in 2020 year, F&O space concluded October series with eight per cent gain. The monthly derivatives series closed on positive note in April, June, July, August and October. Coming to F&O rollovers to November series, the Nifty Futures began with an OI of 1.05 crore shares from previous 0.84 crore shares in OI. The November series started with Rs98,189 crore as against Rs 90,264 crore and Nifty futures with Rs12,305 crore versus Rs9,096 crore. Index options recorded Rs1,26,614 crore versus Rs1,17,755 crore and stock options witnessed Rs27,518 crore versus Rs25,044 crore. The NSE Nifty’s rollover to November was 77.45 per cent as against 70.63 per cent in October series, 3-month average of 76.05 and 6-month average of 76.55 per cent. Bank Nifty November month rollover is at 73.59 per cent versus 79.05 per cent. The market-wide rollover is at 92.85 per cent versus 92.51 per cent. The NSE Nifty started the November derivatives series with 10 million shares again 8.5 million shares seen in the last series. The roll spread in both the Nifty and Bank Nifty turned negative suggesting marginal short formation ahead of the US election output. 

The October series recorded the expiry with a very low OI of just 83 lakh shares, The Nifty witnessed a sharp pull-back from 10,800 to around 12,000 level. Despite some selling pressure, it closed the October contract with significant gain of eight per cent. Majority of the upmove in Nifty was backed by significant long addition as month-on-month, the OI in the Nifty rose by 26 per cent. Analysts forecast that the rollover of 77.45 per cent against 3-month average of 76.05 per cent was on the mix side as rollover cost fell by two points. Nifty recorded most of the rollover on the longer side. The Bank Nifty outperformed Nifty as it closed with a spectacular gain of 17 per cent with five per cent fall in OI indicating short covering in the index. Rollover in the Bank Nifty was bit on the lower side at 73.59 per cent as against 3-month average of 77.42 per cent.

The writer is a business journalist with 27 years of experience


Number of views (177)/Comments (0)

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free