Stunned by the sustained fall in the cash market on the back of sub-prime woes, foreign institutional investors (FIIs) have upped short positions in the derivatives segment in order to hedge their positions in the cash market. Another interesting aspect is that the build-up of short positions is restricted to several large-cap and index heavy-weights.
Siddharth Bhambre, derivaties analyst, Angel Broking said, ?Looking at the positions, it seems that FIIs are also among the confused lot with the sustained volatiity that have gripped the market. They have covered their long and short positions in Nifty furtures and some of the individual stock futures and are seen sitting on the sidelines of the market. However, the build up in heavy-weights and some of the index stocks indicate that the big investors are active and are hedging their cash market positions. The build-up hints at institutional players and FIIs in particular.?
The rise in short positions in the stock futures include scrips like RIL, ICICI Bank, ONGC and other index heavyweight stocks.
The weakness continued in the market and was witnessed in the Nifty futures (August series), which was trading at 4,303 as compared to Friday?s close of 4,333.35 points.
Viral Doshi, head derivatives strategist, Networth Stockbroking, said, ?The weakness in the market is expected to continue further till Nifty breaches the 4,435-level. This seems unlikely in the recent volatile times as Nifty will have to close above that level with commensurate rise in the volumes. It seems very unlikely that it can fulfil this condition at this point of time.?