Whereas the risk-off sentiment on India has prompted foreigners to speed up exits in current weeks, their web bearish positioning in derivatives is the very best since March 2023, with the 50% tariffs on Indian exports to the US deepening the cautious undertone.
“Persistent overseas promoting, together with brief build-up, displays a transparent risk-off method due to world uncertainties and home headwinds,” stated Sudeep Shah, vice-president and head of technical and spinoff analysis, SBI Securities.
Businesses ‘Improper Facet of Tariffs’
Overseas traders have bought shares value practically Rs 15,990 crore thus far in August, after pulling out Rs 17,740 crore in July. Within the derivatives section, the long-short ratio of foreigners’ positions fell to eight.28%, from 15% within the third week of July and 36.7% at the start of that month, based on SBI Securities. The long-short ratio is a broadly tracked indicator of merchants’ bullish bets versus the bearish ones in index futures.
When this ratio for FPIs’ futures positions falls, it indicators a build-up of brief positions by them, specialists stated.
“The FPI long-short ratio in index futures is indicating some of the bearish stances in current occasions, with practically 10 shorts for each lengthy place,” stated Ajit Mishra, senior vp, analysis, Religare Broking. This gauge was between 10% and 20% late final 12 months and early in 2025, when the sentiment was far more bearish.
The Nifty and Sensex have simply prolonged their shedding run to the sixth week in a row-the longest such spell in 5 years. The rupee additionally ended decrease for a fifth week operating at 87.65 towards the greenback.
Abroad traders, already uneasy over the wealthy valuations of Indian shares in comparison with their long-term averages and rising market friends, have been in hot-and-cold mode for many of 2025. The Trump administration’s further 25% tariff on Indian items, taking the entire levy to 50% -among the very best on any country-may be steering them to different markets.
“Numerous different fairness markets at this level supply higher risk-reward propositions and extra certainty in comparison with Indian equities,” stated Sham Chandak, head of institutional equities at Elios Monetary Companies. “Overseas contributors in our market sense that with India ending up on the fallacious facet of tariffs, non-public capex and in phrases consumption is prone to develop slower than anticipated earlier.”
Silver lining
For optimists, a low long-short ratio studying gives a silver lining.
“From a contrarian perspective, such an especially low long-short ratio may additionally sign that the market is oversold within the brief time period,” stated Shah. “Any constructive set off akin to easing world tensions or beneficial home cues may result in brief protecting, leading to a pointy rebound.”
Whereas the risk-off sentiment on India has prompted foreigners to speed up exits in current weeks, their web bearish positioning in derivatives is the very best since March 2023, with the 50% tariffs on Indian exports to the US deepening the cautious undertone.
“Persistent overseas promoting, together with brief build-up, displays a transparent risk-off method due to world uncertainties and home headwinds,” stated Sudeep Shah, vice-president and head of technical and spinoff analysis, SBI Securities.
Businesses ‘Improper Facet of Tariffs’
Overseas traders have bought shares value practically Rs 15,990 crore thus far in August, after pulling out Rs 17,740 crore in July. Within the derivatives section, the long-short ratio of foreigners’ positions fell to eight.28%, from 15% within the third week of July and 36.7% at the start of that month, based on SBI Securities. The long-short ratio is a broadly tracked indicator of merchants’ bullish bets versus the bearish ones in index futures.
When this ratio for FPIs’ futures positions falls, it indicators a build-up of brief positions by them, specialists stated.
“The FPI long-short ratio in index futures is indicating some of the bearish stances in current occasions, with practically 10 shorts for each lengthy place,” stated Ajit Mishra, senior vp, analysis, Religare Broking. This gauge was between 10% and 20% late final 12 months and early in 2025, when the sentiment was far more bearish.
The Nifty and Sensex have simply prolonged their shedding run to the sixth week in a row-the longest such spell in 5 years. The rupee additionally ended decrease for a fifth week operating at 87.65 towards the greenback.
Abroad traders, already uneasy over the wealthy valuations of Indian shares in comparison with their long-term averages and rising market friends, have been in hot-and-cold mode for many of 2025. The Trump administration’s further 25% tariff on Indian items, taking the entire levy to 50% -among the very best on any country-may be steering them to different markets.
“Numerous different fairness markets at this level supply higher risk-reward propositions and extra certainty in comparison with Indian equities,” stated Sham Chandak, head of institutional equities at Elios Monetary Companies. “Overseas contributors in our market sense that with India ending up on the fallacious facet of tariffs, non-public capex and in phrases consumption is prone to develop slower than anticipated earlier.”
Silver lining
For optimists, a low long-short ratio studying gives a silver lining.
“From a contrarian perspective, such an especially low long-short ratio may additionally sign that the market is oversold within the brief time period,” stated Shah. “Any constructive set off akin to easing world tensions or beneficial home cues may result in brief protecting, leading to a pointy rebound.”
