Foreign investors are betting against Indian equities as October begins, with the September derivatives expiry signalling a sharp risk-off turn, according to brokerage analyses reported by Reuters.
The monthly expiry on Tuesday, September 29, brought a broad unwinding of bullish positions, a fresh buildup of shorts and heavier foreign selling as markets grappled with a global bond rout. The benchmark Nifty 50 fell 6.7% during the September derivative series, making it the worst performer among Asian markets, while the Bank Nifty declined 5.7% and contributed the most to the benchmark's losses.
Shorts jump to 2.67 lakh contracts
Foreign institutional investors' net index-futures shorts rose to about 267,000 contracts from 184,000 at the previous expiry, according to Nuvama data. Overseas investors also sold $2.7 billion of Indian shares in the spot market — a six-month high — pointing to a broad-based selloff.
Rollovers were in line with averages: the Nifty rolled over 74%, matching the three-month average, while Bank Nifty rollovers stood at 79%, marginally above the 78% average, per Ambit Capital, IIFL Capital and Nuvama.
What October could bring
IIFL Capital expects October may deliver a "technical rebound" but not a durable return to risk-on sentiment. It sees scope for a bounce toward 23,300 as the Nifty approaches 22,500, but warns that a sustained break below 22,400 could open the door to deeper losses.
Nuvama sees the benchmark trading between support at 22,350 and resistance at 23,400, despite otherwise favourable seasonal trends. Nearly half of futures-and-options stocks ended the series with longs unwound, and more than 40% saw a buildup of shorts, per Nuvama and Ambit.
Domestic institutions cushioned some of the pressure, with retail investors staying long on stock futures — a sharp divergence from the foreign positioning that could define the month's trading.
Sources: Indian shares set for weak October as foreign investors ramp up shorts — Reuters
The monthly expiry on Tuesday, September 29, brought a broad unwinding of bullish positions, a fresh buildup of shorts and heavier foreign selling as markets grappled with a global bond rout. The benchmark Nifty 50 fell 6.7% during the September derivative series, making it the worst performer among Asian markets, while the Bank Nifty declined 5.7% and contributed the most to the benchmark's losses.
Shorts jump to 2.67 lakh contracts
Foreign institutional investors' net index-futures shorts rose to about 267,000 contracts from 184,000 at the previous expiry, according to Nuvama data. Overseas investors also sold $2.7 billion of Indian shares in the spot market — a six-month high — pointing to a broad-based selloff.
Rollovers were in line with averages: the Nifty rolled over 74%, matching the three-month average, while Bank Nifty rollovers stood at 79%, marginally above the 78% average, per Ambit Capital, IIFL Capital and Nuvama.
What October could bring
IIFL Capital expects October may deliver a "technical rebound" but not a durable return to risk-on sentiment. It sees scope for a bounce toward 23,300 as the Nifty approaches 22,500, but warns that a sustained break below 22,400 could open the door to deeper losses.
Nuvama sees the benchmark trading between support at 22,350 and resistance at 23,400, despite otherwise favourable seasonal trends. Nearly half of futures-and-options stocks ended the series with longs unwound, and more than 40% saw a buildup of shorts, per Nuvama and Ambit.
Domestic institutions cushioned some of the pressure, with retail investors staying long on stock futures — a sharp divergence from the foreign positioning that could define the month's trading.
Sources: Indian shares set for weak October as foreign investors ramp up shorts — Reuters
