Foreign investors ramped up bullish bets on stock futures on May 12 as border tensions subsided

Foreign investors ramped up bullish bets on stock futures

Foreign institutional investors (FIIs) significantly ramped up their bullish bets in stock futures on May 12, even as the benchmark indices clocked its biggest-ever single-day gain in absolute terms, after border tensions with Pakistan subsided and US-China agreed to bring down reciprocal tariffs for 90 days.

FIIs added 78,532 long contracts and covered 29,899 shorts, boosting their net long position by 108,431 contracts, taking the long-short ratio up from 1.88 to 1.94.

In contrast, domestic institutional investors (DIIs) maintained a cautious stance, and added just 301 long contracts while increasing short positions by 23,675 contracts, thus reducing their net position by 23,374.

The DII long-short ratio nudged lower from 0.61 to 0.60, reflecting a continued short-heavy bias.

Over the last 14 trading sessions, FIIs have systematically cut their index short positions as well, taking the net open interest from -78,335 contracts on April 22 to marginally net long on May 12.

“Clearly, data shows FIIs have a strong bullish bias, while DIIs remain broadly bearish in stock futures,” Preeti Chabra, Founder of Trade Delta said.

Client activity was relatively stable but skewed towards the long side, with 7,825 long contracts added versus 5,860 shorts, resulting in a net increase of 1,965 long contracts.

Sahaj Agrawal, Head of Derivatives at Kotak Securities, said that FIIs were active in IT derivatives on May 12. “Long additions were visible mainly in banking and midcap indices. Last week’s laggards like auto, IT, metals, and FMCG also helped push momentum higher,” he said.