FIIs Add Over 76,000 Nifty Short Positions In Four Sessions As Derivatives Selling Intensifies

Foreign Institutional Investors (FIIs) sold index futures worth ₹14,261.41 crore across Nifty, Bank Nifty, Fin Nifty, Nifty MidCap, and Nifty Next 50 contracts between May 26 and June 1, according to NSE data. The pace of selling has emerged as one of the most aggressive seen in recent months, coinciding with weakness in the benchmark indices.

During the four-session period, foreign investors were net sellers of 91,041 index futures lots. A large part of the selling occurred after the commencement of the June derivatives series, with net sales of 70,315 lots recorded over the last three sessions alone.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Nifty futures accounted for the bulk of the activity. Data showed that FIIs added 76,209 short lots in Nifty futures during the four trading sessions, including 57,429 lots after the June series began.

Selling Pace Near Multi-Month High

The magnitude of the recent sell-off stands out not only because of its size but also because of the short time frame in which it occurred. NSE data indicates that the only larger index futures sell-off in recent months was recorded between October and November 2025, when FIIs sold contracts worth ₹17,294 crore over a span of 12 trading sessions.

The latest bout of selling took place in just four sessions, highlighting a rapid build up in bearish positioning by overseas investors.

The shift in derivatives positioning came as the Nifty 50 weakened. The benchmark index declined 2.2% over the last three trading sessions and fell as much as 2.7% over the four-session period. The index also slipped below its 20-day, 50-day, 100-day, and 200-day simple moving averages on the daily chart.

Long-Short Ratio Drops Sharply

NSE derivatives data showed the FII long-short ratio in Nifty futures falling to 0.11, indicating that nearly 89% of open positions held by foreign investors are on the short side.

The ratio stood at 0.29 on April 21 when the Nifty traded near 24,577. The latest reading marks its lowest level in nearly three months.

Data further showed that the FII long-short ratio declined to 9.69% on June 1 from 11.98% on May 29, reflecting a continued build-up of short positions at the beginning of the June derivatives cycle.

Domestic Investors Maintain Positive Positioning

While foreign investors increased bearish bets, domestic participants maintained a relatively constructive stance in index futures.

Retail investors’ long-short ratio stood at 2.96, indicating nearly three long positions for every short position. The domestic institutional investor (DIIs) posted a figure of 2.02, while that of proprietors was 1.42.

It is quite clear from their position that they differ in their expectations from the foreign investor and domestic investors. This can be seen by the fact that foreign investors were still building up short positions in the market and the indices below technical levels.