According to the latest F&O data from the National Stock Exchange (NSE), Foreign Institutional Investors (FIIs) have engaged in aggressive selling in the July 2025 series so far. In just 11 trading days, they have made a net sale of ₹16,844.97 crore in index futures.
The largest portion of this selling is in Nifty futures, where a net sale of approximately 68,622 contracts has been recorded. Overall, FIIs have sold 87,554 contracts in Nifty, Bank Nifty, and Midcap futures.
Significant Increase in Short Positions, Long-Short Ratio Falls
According to NSE data, the positioning of FIIs is now rapidly shifting towards the short side. The long-short ratio has fallen to 0.22, meaning there are 5 short trades for every one long trade.
During the same period, the open interest (OI) in Nifty futures also saw a 47 percent increase. This translates to approximately 43,895 new short contracts being registered, clearly indicating a heavy short build-up on Nifty.
Nifty Drops by 1.8 Percent
During this period, the Nifty 50 index recorded a decline of 1.8 percent. An atmosphere of uncertainty prevails regarding the market direction. Only on June 27th did FIIs make a minor purchase for one day, with their stance remaining that of selling throughout the July series.
₹8650 Crore Futures Sold in Three Days
According to Ajit Mishra, SVP (Research) at Religare Broking, the sluggish start to Q1 results and Nifty's fall below the 20-day EMA are the reasons for the increase in short positions. He mentioned that in the last three trading days, FIIs have made a net sale of approximately ₹8650 crore in index futures.
Derivatives Data Indicates Deep Weakness in the Market
According to Dhupesh Dhameja, a derivatives research analyst at Samco Securities, the derivatives data is currently showing very negative signals. He says that call writing is most active at the 25,500 strike, where an open interest of approximately 1.26 crore contracts has been built up. This creates a b supply zone for the market on the upside.
Proprietary Traders Are Completely Neutral
If we talk about proprietary traders, their position appears completely neutral. Their long and short positions are almost equal, which indicates that they are not yet able to make a definitive decision about the market direction.
Fear Shown in Put Writing, 25,000 Becomes New Support
On the put writing front, investors appear most active at the 25,000 strike, where an open interest of approximately 89.89 lakh contracts has been built up. But despite this, put writing has been quite weak at levels like 25,500 and 25,200, which makes it clear that investors are not confident about the upward trend.
DIIs and Retail Investors Take a Slightly Different Stance
While FIIs are building short positions, domestic institutional investors (DIIs) and retail investors have a slightly different approach. They are taking almost two long trades for every short trade. In other words, they still expect that there may be a rise in the market.
Decisive Battle Seen at Technical Levels
According to technical analysts, 25,000 has become an important level for Nifty. If this level breaks, further decline is possible, while if this level holds, there may be expectations of a recovery once again.
What Will be the Big Change in the Second Half of July?
The July series is only halfway through, and such large-scale selling by FIIs has shaken the entire market. Now, eyes are on whether the long positions of retail and DIIs will be able to support the market, or whether short covering will lead to a sudden rise.
