Mumbai : FII buys shares of provisional value 1864.79 crore on Thursday, enabling the market to consolidate its recent gains and the rupee to consolidate 27 paise from its previous close and all-time low of 83.02. Domestic institutional investors saw a provisional volatility in the session 887 crore shares.
However, FIIs remain cautious as they are cumulative net sellers of index futures – Nifty and Bank Nifty – by 62,757 contracts, as on October 19 data shows. They hedge their cash portfolio by shorting index futures at times of volatility.
According to NSE data, their selling counterparts include HNIs and corporates, who together were net buyers of 1.2 lakh index futures contracts.
Rajesh Palviya, Head, Technical & Derivatives, Axis Securities believes that the market could see an upside potential if large volumes of FII ‘shorts’ start covering these positions.
“If they cover their shorts and become buyers in the cash market, the rupee will also cushion or benefit against the dollar,” Palvia said.
On Thursday, Nifty closed 0.3% higher at 17563.95, slightly lower than the 17580 mark, which is a 61.8% retracement of the decline of 16748 on September 30 from 18096 on September 15. Analysts expect Nifty to touch 17800 level if this level is decisively broken.
FIIs have net sold shares 66,450 crore in this financial year, according to Bloomberg, which has pushed the dollar up by 11.3% YTD against the rupee, coupled with rate hikes by the US Fed and a widening trade deficit.
In the last financial year (FY22), he sold shares worth 1.4 lakh crore.
Siddharth Bhamre, Head of Research, Religare Broking expects Nifty to trade in the range of 17200-17800 in the near future.
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