Business
FPIs trim bearish bets, but no rush to buy yet
The Long-Short Ratio – number of traders betting on a rise in prices (long positions) to those betting on a fall (short)-of foreign portfolio investors‘ Nifty futures position stood at 19.4% on Friday, as against 7.5% seen exactly a month ago. Though the measure has fallen from 22.1% on Wednesday following the sell-off in the wake of the renewed AI-related concerns, showing foreigners have increased their bearish positions again, analysts are not concluding anything yet. The ratio made a lifetime low of 5.98% on September 30.
“FIIs have been on a bit of a rollercoaster lately,” said Vipin Kumar, AVP- derivatives and technical research at Globe Capital Market.
AgenciesCHANGE IN MOOD Dip in FII Long-Short Ratio suggests ‘smart money’ is hedging its wagers as global worries over AI-driven volatility linger
Kumar said that after a brief period of optimism fuelled by the India-US trade statement, the Long-Short Ratio of FPIs’ Nifty positions is retreating once more, fuelled by a sharp sell-off in US tech, driven by growing anxieties over AI disruption.
“The recent dip in the FII Long-Short Ratio suggests that the ‘smart money’ is hedging its bets.”
After the announcement of the framework for the US-India trade deal earlier this month, bullish bets increased to 16-17% of total bets from only 11% a day ago.
However, the IT sell-off on Thursday and Friday soured some sentiment. The Nifty ended 1.3% lower at 25,471 on Friday, while the Nifty IT index fell 8.2% during the past week. Akshay Bhagwat, SVP- derivatives research at JM Financial Services, said that since budget day, foreign investors have covered their short bets and also bought index futures, roughly to the tune of Rs 9,400 crore till date.
“However, Nifty has lost its momentum lately, and the Long-Short Ratio has cooled off, back below 20% on profit booking of long bets,” he said.
NO BIG MOVES
After Friday’s decline, Nifty is expected to hold above the 24,850-25,000 zone, said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services. “While the market has struggled to sustain momentum, it continues to form a higher base despite the STT hike, a weaker rupee, and geopolitical tensions,” he said. Taparia expects Nifty to oscillate between the budget-day lows of 24,500 and the highs of 26,300 seen after the US-India trade deal.
Kumar said that the cooling off of the Long-Short Ratio indicates any immediate upside for domestic markets remains capped as global headwinds outweigh local catalysts. “The short-term technical structure for the Nifty has shifted to a negative bias. Following the recent weakness, the index appears to be gravitating toward a price gap created during the February 3 rally, and the key support zone is placed around 25,200-25,000 spot levels,” he said.
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Bitcoin holds near $67K as crypto markets stay muted; volatility seen rising ahead
Over the past 24 hours, Bitcoin rose 0.34%, while Ethereum fell 0.18% to trade at the $2,050 level. Among the major altcoins, BNB, Solana, Tron, Dogecoin, Hyperliquid, and Cardano gained up to 1.07%, while XRP slipped 0.32%. The global crypto market capitalisation went up 0.36% to $2.31 trillion, according to CoinMarketCap.
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Piyush Walke, Derivatives Research Analyst, Delta Exchange, said Crypto markets were subdued on Friday, with no major price movements. Both Bitcoin and Ethereum traded largely sideways, while implied volatilities continued to bottom out. Such conditions are often followed by a period of heightened volatility ahead.
From a technical perspective, sellers would need to push prices below $65K to open the door for a deeper decline toward $60K. On the upside, any meaningful recovery would require a move above $69K, reclaiming the 50-day SMA and breaking back into the lower band of the rising channel, Walke added.
In the past week, Bitcoin and Ethereum went up 1.01% and 3.15%, respectively. Among the major altcoins, BNB, XRP, Solana and Hyperliquid slipped up to 6.68%, whereas Tron, Dogecoin and Cardano gained up to 1.78%.
WazirX Market’s Desk said the crypto market remained stable this week with reduced volatility and improving sentiment. Bitcoin traded within the $66,000–$67,000 range, holding key levels despite earlier macro pressure. Ethereum’s performance over the week was impressive, gaining around 3.7%, supported by continued ecosystem activity and capital rotation.
Institutional signals turned constructive. Bitcoin ETFs recorded their first inflows since October as prices stabilised, indicating renewed demand, WazirX Market’s Desk further said.
According to Binance Weekly Market Research, Bitcoin’s correlation with the Global Easing Breadth Index (GCBI) has turned negative post-ETF (2024–2026), signalling growing maturity as the market prices macro trends ahead rather than reacts to them.
“We think this reflects a shift in marginal price-setting from retail to institutions after ETFs. Since assets are priced by the marginal buyer, and institutions process macro information earlier (often 6–12 months ahead of policy moves), positioning can lead the rate cycle rather than lag it.”
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As a result, BTC may have evolved from a macro “lagging receiver” to a “leading pricer.” A peak in easing may already be old news for BTC, and crypto-native drivers—such as policy progress and institutional flows—could matter more than the direction of monetary easing itself, the report further said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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