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FPIs cut Bank Nifty futures shorts ahead of RBI policy
Foreign investors reduced incremental bearish exposure in Bank Nifty futures to ₹1,074 crore by 5 October, from ₹1,980 crore on 25 September, as the RBI decision approaches.
Foreign investors have trimmed their incremental net shorts in Bank Nifty futures ahead of the Reserve Bank of India's policy decision, according to LiveMint Markets, signaling a shift toward a more constructive stance on banking stocks.
The decline in active futures shorts for Bank Nifty moved from ₹1,980 crore as of 25 September to ₹1,074 crore as of 5 October, with analysts linking the cover to expectations for an RBI hike that meets the market consensus.
LiveMint Markets said the RBI is widely expected to raise the repo rate by 25 basis points to 5.50% on Wednesday, the first increase in more than three and a half years, while keeping its neutral policy stance. Markets have largely priced in both the hike and unchanged stance, leaving investors focused on any policy-related signals that could support further gains.
NSE data cited by LiveMint Markets showed FPIs bought back or covered ₹906 crore worth of shorts over five sessions through Monday after net selling totaled ₹1,980 crore between 7 September, when the latest contracts began trading, and 25 September.