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Business Recorder
30-05-2025
- Business
- Business Recorder
Foreign investors raise bets that India stock market rally may stall
Foreign investors are becoming more cautious about the Indian stock market, indicating a three-month rally may run out of legs despite retail traders growing optimistic, according to monthly derivatives data analysed by two brokerages. The Nifty 50 has risen about 12% from March through May, largely due to better-than-expected corporate earnings and easing global trade risks. That is nearly double the 6.6% gain in the MSCI Emerging Markets index in that time. Foreign portfolio investors (FPIs) pumped $2.66 billion into Indian equities over that period and cut their short positions on the Nifty. A short seller borrows stock at a higher price betting its value will decline, at which point they buy the stock and pocket the profit. However, FPIs have started the June derivatives series – which runs from May 30 to June 25 – with about $2 billion in Nifty index futures shorts, the highest since February, according to Nuvama Alternative and Quantitative Research. In contrast, retail investors and high-net-worth individuals (HNIs), called the client category, turned bullish with long positions worth $1.54 billion on Nifty futures, compared with $546 million in shorts from early May. Indian benchmarks end May with gains as investors wait for growth data 'This divergence sets up a potential tug-of-war between institutional caution and retail optimism, and could lead to a brief pause in the market rally in June,' said Abhilash Pagaria, head of Nuvama. Indeed, the Nifty's gains have weakened in each month – from 6.3% in March to 3.5% in April and to about 2% in May. 'Markets appear to be waiting for some concrete cues before turning bullish,' said Sriram Velayudhan, VP at IIFL Securities. Velayudhan expects the Nifty 50 to trade between 24,300 and 25,300 points over the June series, compared with its current level of about 24,800 points. Analysts expect the Nifty to hit new highs by end-2025, but say a correction is likely in the next three months, according to a Reuters poll.
Time of India
30-05-2025
- Business
- Time of India
Foreign investors grow wary of Indian stock market rally
Foreign investors are becoming more cautious about the Indian stock market, indicating a three-month rally may run out of legs despite retail traders growing optimistic, according to monthly derivatives data analysed by two brokerages. The Nifty 50 has risen about 12% from March through May, largely due to better-than-expected corporate earnings and easing global trade risks. That is nearly double the 6.6% gain in the MSCI Emerging Markets index in that time. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like "봉자인터넷"이 105만원을 드립니다 봉자인터넷 더 알아보기 Undo Foreign portfolio investors (FPIs) pumped $2.66 billion into Indian equities over that period and cut their short positions on the Nifty. A short seller borrows stock at a higher price betting its value will decline, at which point they buy the stock and pocket the profit. However, FPIs have started the June derivatives series -- which runs from May 30 to June 25 -- with about $2 billion in Nifty index futures shorts, the highest since February, according to Nuvama Alternative and Quantitative Research. In contrast, retail investors and high-net-worth individuals (HNIs), called the client category, turned bullish with long positions worth $1.54 billion on Nifty futures, compared with $546 million in shorts from early May. Live Events "This divergence sets up a potential tug-of-war between institutional caution and retail optimism, and could lead to a brief pause in the market rally in June," said Abhilash Pagaria, head of Nuvama. Indeed, the Nifty's gains have weakened in each month -- from 6.3% in March to 3.5% in April and to about 2% in May. "Markets appear to be waiting for some concrete cues before turning bullish," said Sriram Velayudhan, VP at IIFL Securities . Velayudhan expects the Nifty 50 to trade between 24,300 and 25,300 points over the June series, compared with its current level of about 24,800 points. Analysts expect the Nifty to hit new highs by end-2025, but say a correction is likely in the next three months, according to a Reuters poll.
Economic Times
15-05-2025
- Business
- Economic Times
MSCI adds Coromandel International and Nykaa to Global Standard Index
Mumbai: Global index provider MSCI said it has added Coromandel International and FSN E-Commerce Ventures (Nykaa) to its Global Standard Index in its May 2025 semi-annual index review. These changes, effective as of market close on May 30, are expected to trigger passive fund flows worth $408 million into the two stocks, according to IIFL Capital Services. ADVERTISEMENT MSCI's index changes result in passive flows because trillions of dollars in global funds track its benchmarks. When a stock is added or removed, index-linked ETFs and mutual funds are forced to buy or sell to mirror the index composition. MSCI made cuts in its India Small Cap Index, deleting 22 stocks while adding 11. The removals from the index could be one of the highest in recent times. "In recent times, more small-cap companies were being added to the MSCI small-cap index. This time, we have seen more deletions than additions, possibly because of a reversal in the trend in small caps," said IIFL's senior vice president, Sriram Velayudhan. Acme Solar, Tata Technologies, Godrej Agrovet, and Hexaware Technologies are among the 11 stocks to be added to the small-cap index. Godrej Industries, Gujarat Alkalies and Chemicals and Aarti Drugs are among the 22 deletions. IIFL said Coromandel's inclusion would result in flows of $227 million, while Nykaa would receive $181 million. ADVERTISEMENT In addition, MSCI said the weightage of Cipla, Indus Towers and Grasim Industries has gone up in the Global Standard Index. This would lead to inflows of $45 million, $40 million and $16 million, respectively, IIFL said. The weightage of Astral went down, which may lead to an outflow of $15 million from the stock. India's weight in the Global Standard Index was 19.4% as on the cutoff date. (You can now subscribe to our ETMarkets WhatsApp channel)
Reuters
31-01-2025
- Business
- Reuters
Derivatives data signals relief rally for Indian stocks, brokerages say
Jan 31 (Reuters) - After a punishing few months, India's benchmark NSE Nifty 50 index (.NSEI), opens new tab is poised for a relief rally in February, based on the changes in investors' positioning in the derivatives markets, brokerages said. The Nifty has tumbled 11.3% over the last four monthly derivatives series, each of which spans between the last Thursdays of a month, with the most recent one ending on Jan. 30. However, about 81% of the total Nifty futures at the end of the January series was rolled over into the February series, based on National Stock Exchange data, higher than the average of 77% in the previous three series. That indicates traders' willingness to build on their current positions, leading to likely stability in the markets. The Nifty has dropped about 0.8% so far in January, poised to finish lower for the fourth month in a row in its longest monthly losing streak in 23 years. It has tumbled 9.2% in the past four months, a drop that derivatives data had indicated was possible. This time around, the data is more encouraging. At the end of the January series, the addition in open interest (OI), or the total number of active unsettled futures contracts, was the highest in the financial services and information technology index futures, according to Nuvama Alternative and Quantitative Research. This implies potential higher activity in their underlying securities due to the availability of more buyers and sellers and is crucial since these two sectors have a combined weightage of about 50% among the 13 major indexes. Another encouraging sign was the positioning of foreign portfolio investors (FPIs), whose total outflows of $20.5 billion in the past four months have been instrumental in the Nifty's decline. While FPIs added Nifty index shorts in the January series, they reduced short positions in index futures in the last six sessions, raising expectations that their outflows might slow down. Overall, investors' positioning in derivatives markets at the start of the February series signals the scope for a relief rally, according to Nuvama and IIFL Securities. However, there are two important events that could help decide the market's path -- the annual budget on Saturday, Feb. 1 and the Reserve Bank of India's policy decision next Friday. The RBI's mega liquidity infusion package that kicked off on Thursday has raised hopes of an interest rate cut. "Any budgetary support to complement the central bank's measures to inject liquidity in the banking system is likely to cheer the markets," said Sriram Velayudhan of IIFL Securities. Nuvama said that a growth-focussed budget could trigger FPI short-covering in derivatives contracts in financials, leading to an immediate market rally.
