📉 FIIs Activity
FIIs sold ₹1100+ cr in the cash market, showing persistent caution. In the F&O segment, they have covered some net index shorts, but the magnitude of covering is not as strong as expected. This suggests that while FIIs are trimming bearish bets, they are still not fully confident about a sustained rally. Their cautious stance is keeping short positions alive at higher levels.
🌍 Global Sentiment – Fed Rate Cut Boost
The US Fed has cut rates by 25 bps and guided for two more cuts in 2025. This dovish stance has ignited global optimism, with equities across the world rallying. For India, this is a tailwind as lower global rates improve liquidity conditions and attract risk-on flows. However, FIIs’ reluctance to aggressively unwind shorts indicates that they are still waiting for more clarity before deploying fresh large capital.
📊 Technical View
Nifty’s structure continues to remain positive. As highlighted earlier, we expect Nifty to test 25,500 during this week. The zone near 25,500 will act as a key resistance given the heavy FII short positioning still present in index futures. A clear breakout above this level will likely require a strong catalyst such as robust corporate earnings or incremental FII buying.
📈 Market Triggers – Earnings in Focus
The upcoming corporate results season will decide whether Nifty can sustain above 25,500 or not. Market participants will closely track commentary on demand recovery, margin resilience, and management guidance. Any disappointment could lead to profit booking near resistance levels, while strong results may provide the trigger for the next leg of the rally.
🎯 Our Stance
Remain constructive with a selective approach. We prefer exposure in mid & small caps where stock-specific opportunities are emerging, but strict stop-loss discipline is essential given the resistance zone on Nifty. Risk-reward is favorable in pockets of financials, consumption, and niche manufacturing, but chasing momentum blindly at index resistance should be avoided.
