The long-short ratio-the proportion of bullish (long) positions to bearish (short)-of foreign portfolio investors’ Nifty futures wagers rose to 22% on Friday, close to the 18-21% range seen in the last week of February before the start of the US-Iran clash on February 28.

The reading had fallen to 9.9% on March 13 and stayed between 10% and 18% for most of the fighting period as these investors had increased the hedges against their portfolios. The ratio had made a lifetime low of 5.98% on September 30, 2025.

ET Bureau

The short covering came amid Nifty’s weekly gains of 5.9% until Friday, when it ended at 24,050.6, its highest closing level in a month.

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“FIIs had begun covering shorts in the derivatives segment in the past few days, signalling early reversal cues,” said Nilesh Jain, head of technical and derivatives research, Centrum Finverse.. “Friday’s return to buying in the cash market after multiple sessions is a positive development and could support further pullback alongside continued short covering.”
FPIs were buyers to the tune of ₹672 crore in the cash market on Friday, after remaining sellers in all trading sessions in March and April so far. Further cuts in bearish positions will depend on the progress of the US-Iran talks, which began on a sour note over the weekend . “While the long-short ratio has improved due to short covering, we do not see many fresh long additions, suggesting that FIIs remain cautious rather than bullish,” said Siddarth Bhamre, head of institutional research at Asit C Mehta. “Continued selling in cash markets with one day of pause is not a sign of a U-turn in sentiment.” Since end of September 2024, when the downtrend in Indian equities kicked in, the long-short ratio of FPIs’ Nifty futures positions has mostly stayed between 10% and 20%, indicating predominantly bearish bets. Before the slide started, the reading was at 81%.

Somil Mehta, head of retail research at Mirae Asset Sharekhan said the shift in the ratio is yet to show foreigners are back to their bullish ways. “Sustained improvement in their sentiment will depend on stability in global factors like crude oil prices and geopolitical developments,” he said. The progress in companies’ fourth quarter earnings will be one of the factors for foreigners to revisit their stance on Indian equities.

“If earnings remain under pressure, valuations may not be attractive to foreign investors. They are also likely to wait for currency stability in India,” said Bhamre.

As green bond and loan activity cools elsewhere, the Asia Pacific region is emerging as a rare engine of growth in the world’s sustainable finance market, according to a new report from ING.

Key takeaways

• Asia Pacific bucked a global decline in sustainable finance in 2025, posting strong growth in green bonds and loans driven by financial institutions and corporations.
• ING forecasts a rebound in global sustainable issuances to US$1.621 trillion in 2026, with Asia Pacific expected to lead momentum through transition finance.
• While EMEA remains the largest sustainable finance market, corporate appetite there is softening, making Asia Pacific’s real-economy demand increasingly decisive for global growth.

Despite mounting geopolitical and economic turbulence rattling global markets, the Asia Pacific is holding its ground and in some areas, pulling ahead in sustainable finance. That is the central finding of Dutch banking group ING’s latest Sustainable Finance Pulse report, which paints an increasingly divergent picture between a softening West and a resilient, growing East.

Globally, sustainable issuances totalled US$1.557 trillion in 2025, a decline of roughly 6.7 per cent from the US$1.669 trillion raised the previous year. Yet within that subdued global picture, Asia Pacific stands out. The region recorded strong year-on-year growth in green bonds and green loans in 2025, even as sustainability-linked loans and transition bonds experienced a modest pullback.

The drivers of that growth are notable. Financial institutions and corporations led the expansion, while governments, supranational firms, and sovereign funds and agencies saw a slight decline in activity. ING also reported record-high sustainable finance volumes in the region last year, driven by robust deal activity across the first three quarters and its leading role as sustainable finance coordinator on the majority of its transactions.

A Pivot Point for Transition Finance

Looking ahead, ING is cautiously optimistic. “In 2026, we expect to see more growth from Asia Pacific and potentially a pick-up in transition issuance as policy frameworks continue to develop across the region,” said Martijn Hoogerwerf, head of ING’s sustainable solutions group in Asia Pacific. The bank specifically flagged the possibility of a rebound in transition bond debt, instruments designed to help carbon-intensive industries shift toward cleaner operations, as regulatory architecture matures across regional markets.

The demand underpinning this growth, ING argues, is structural rather than speculative. “The resilience of Asia Pacific’s sustainable finance market is increasingly underpinned by real-economy demand in areas such as energy, infrastructure and digital capacity,” said Anand Sachdev, country manager for ING Singapore and head of South and Southeast Asia.

Sachdev also pointed to a shift in client priorities. Companies in the region are increasingly focused on “practical, bankable green and transition financing solutions,” underscoring the growing importance of structuring expertise in delivering credible decarbonisation pathways.

Contrast with EMEA

The contrast with Europe, the Middle East and Africa is striking. While EMEA is expected to remain the largest source of sustainable finance globally in 2026, its growth will be led by governments and financial institutions, even as corporate issuances see a notable decline. ING attributes this partly to the relative ease of accessing conventional, non-ESG-linked debt, and describes sustainability-linked instruments in the region as a weak spot.

Bucking that trend within EMEA, however, is Central and Eastern Europe. Sustainable issuances there surged 40 per cent year-on-year in 2025, driven by sovereigns and state-owned enterprises.

A Cautious Global Rebound Expected

Despite the global dip in 2025, ING sees reasons for renewed confidence. The bank is forecasting a recovery to around US$1.621 trillion in sustainable issuances for 2026, pointing to a relatively strong start to the year with US$257 billion coming to market in January and February alone. March, however, brought a slowdown as market volatility linked to conflict in the Middle East weighed on sentiment.

For the Asia Pacific, the trajectory appears more insulated. With policy frameworks catching up to market appetite and corporations seeking credible paths to decarbonisation, the region looks set to play an increasingly central role in shaping how the world finances its climate transition.

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Stocks were set to fall in Asia and S&P 500 futures dropped around 1.1% in early trade. Benchmark Brent crude futures opened about 7.5% higher at $102.37 a barrel.

The euro fell about 0.5% to $1.1672.

Marathon talks in Islamabad ended in stalemate and U.S. President Donald Trump on Sunday ‌said the U.S. ⁠Navy would ⁠itself start blockading the Strait of Hormuz.

Iran has effectively closed the choke point for 20% of the world’s daily energy supplies since the war started in late February, driving up oil prices by more than 30% and fuelling fears of a surge in inflation that has whacked bond markets.

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U.S. Treasury futures sank in early trade and gold , which has been a loser as investors have cashed out profits from its long pre-war rally, fell almost 2%.
“This is an absolute unwinding of any optimism heading into the peace talks into that play of dollar: safe-haven; oil jumping and selling ⁠out of ‌everything else,” City Index senior market analyst Fiona Cincotta said. “On the other hand, we have seen the markets over-exaggerate sometimes. And I think especially around this scenario, the market is struggling to really price ⁠it correctly, because there is so much uncertainty, so many unknowns.”

Moves early on Monday dragged many asset prices back near where they had traded in the middle of last week, before the U.S. and Iran had struck a two-week ceasefire deal.

“The market is now largely back to conditions before the ceasefire, except now the U.S. will block the remaining up to (2 million barrels) Iranian-linked flows through the Strait of Hormuz as well,” said Saul Kavonic, MST Marquee analyst in Sydney.

“The key remaining question is if the U.S. renews strikes on Iran, raising the risk of strikes on energy infrastructure across the region which could have a further ‌lasting impact beyond the duration of the war.”

The Wall Street Journal reported Trump and his advisers were now weighing limited strikes on Iran.

Risk-sensitive currencies such as the Australian dollar and sterling came under pressure, falling 0.7% and 0.5%, respectively. The dollar rose ⁠0.3% to 159.78 yen.

With expectations building for a resurgence in inflation, investors have priced in the possibility of several central banks, such as the European Central Bank and Bank of England, leaning towards raising interest rates this year, in stark contrast with pre-war expectations for cuts or steady rates.

Global equities, which ended last week around their highest since early March, buoyed by optimism that the United States and Iran were heading towards some kind of resolution, are still 2% below where they were prior to the war breaking out.

Trump said on Sunday that the price of oil and gasoline may remain high through November’s midterm elections, a rare acknowledgement of the potential political fallout from the war.