Well said by well known American Economist W. Edwards Deming that, "WITHOUT DATA YOU'RE JUST ANOTHER PERSON WITH AN OPINION".
I always wondered why he has not added without data INTERPRETATION. Now a days, data is available on just a click, the real problem starts with efforts to collect the authenticate data, maintaining it and interpreting it. Previously no one was even talking about FPI data so frequently but now even small investors talk about it, Unfortunate part of it is, they talk only the language of their influencers.. So now a days it will be appropriate if you say 'Without data interpretation of your own you are just another person with an opinion of others.
In this blog, I will just try to give little bit more data than previous blog, of course from the authentic sources. I will also share my opinion but I request you to please interpret this data at your best of the capacity. You can also cross check the data and point out if I have made any mistake in the analysis.
Picture this: FPIs swooping into the Indian market like Heroes in a masala movie, ready to shake things up with their foreign funds and fancy suits. They bring money, they bring excitement and most importantly, they bring a whole lot of drama!
One day, FPIs are showering the market with love, buying up stocks like they're going out of style. The next day? Well, let's just say they might as well have disappeared into thin air faster than a magician in a magic show. And your portfolio is left wondering, "was it all just a dream?"
But, who can blame them? FPIs are like cool kids at the party, sometimes they're all in, dancing on tables and making it rain rupees. Other times, they're just ghosting the scene faster than you can say "SENSEX".
Fortnightly Sectoral Shifts:
I am sharing the data for 2 fortnights here as previously fortnight data was not presented due to late updation of the data from the source. It covers the data from 15th April to 30th April 2024 and from 30th April to 15th May 2024. Reader must look at the data in continuation which will suggest current confused scenario of the stock market.
I want you to capture the +Ve and -Ve signs in the % change column of the above table. One questions arises here AISA KYA HUA 15 DIN MAIN KI HALAT HI BADAL GAYE?? 15th April to 30th April was lovely positivity, Market touched 1st ATH (all time high) of 22775 (NIFTY) on 10th April 2024 (2nd ATH which is current ATH on May 03,2024, which is 22794.70- NIFTY.). Then for next 15 days, lovely negativity. Nifty levels came down by 3%, that are around 691 points.
Below table shows the winners and losers.
Winners First:
Losers:
The highlighted losers were net winners in the last fortnight. All are negative in this latest fortnight by either same gain they had previously or greater than that. I guess FPIs either realized that they made mistake by investing these sectors as the elections are yet not over or they are just playing ultra short term in the market. Quite unusual behaviour of smart money.
If you notice closely, Automobile and auto component sector was hot favourite of FPIs from quite some time, while Chemical sector is replacing that position for FPIs. While they are hating IT since very long. Forest material as sector showed negativity after the positive run for quite some time.
Realigning the individual satellite stock portfolios with big players at high valuations of the market always make sense.
Country Wise FPI Money Flow:
This data is not available for the current month that is May 2024. Looking at the data till April 2024, This data should give smile on investors face.
Source: NSDL
This data shows that FPIs from Canada, Japan, Norway, Singapore, Mauritius leading the table of the Net investors of Indian stock market, as all have contributed in investing. For the month of May 2024 we can get to know only after the end of the month.
Monthly FPI Net Investments:
This table gives the idea about what FPIs are upto. FPIs looks negative in equity investments but the money has moved to debt, debt VRR and hybrid investments, net basis FPIs looks positive towards Indian economy for sure.
*For May 2024: figures are captured as on 17th May 2024.
Equity CASH Segment:
Except March 2024, FIIs are taking out the money from Cash segment of Indian stock market.
Fiis are net SELLERs in the cash segment with -1,18,729.46 Cr. worth net selling from Jan 2024 till date while Diis are net BUYERS in the cash segment with +1,58,646.42 Cr. worth net buying for the same period. Clearly we can see that Diis are managing to control the market as of now, while Fiis showing the negativity in cash segment but positive on overall Indian market gives confidence to the investors. As we know that election is the event which decides the sectoral shifts and money inflow and outflow, this negativity of the Fiis from cash segment of Indian stock market may be for rebalancing and restructuring of their portfolio.
Fiis monthly figures in cash segment are as below:
Jan 2024: -35977.97 Cr.
Feb 2024: -15967.72 Cr
Mar 2024: +3314.47 Cr.
Apr 2024: -35693.19 Cr.
May 2024: -35532.47 Cr. as on 17th May 2024.
*All data is from personal records, recorded daily from www.nseindia.com and www.moneycontrol.com
Rate of selling is way higher in the month of May 2024 as it has already crossed 35532 Cr. If Fiis still are selling in the cash segment then that will be highest figure since last 7 months.
I always face the question that why I always follow FIIs and not DIIs, when DIIs most of the time in the recent past are successful in maintaining market high. Also there is lot more data available that Diis which includes mfs, pms houses are gaining a lot more inflows than ever in terms of equity investments.
The reason is very simple, Diis are not allowed to participate in derivatives actively, they can only take the hedged positions in the derivative segment. They are not at all participative in the Option category of derivatives except for very less times, like once in a blue moon. I have been maintaining the market data since many years in row on daily basis, I have observed that FIIs will always work on the Valuations of the market, so be it indices or the stocks. If they are looking market has become overvalued they will somehow manage to pull down the market, and yes they do not hesitate to take down the market by using Future short positions. Below is the reference of current situation in Indian derivative market, especially futures, as options are used for pure hedging purposes.
INDEX FUTURES SEGMENT:
The Long to Short ratio of future positions has its own significance in the future market, probably worldwide. This ratio has proven strong record points that Fiis somehow follow the limits of the ratio. In the past when the ratio is in between 0.3 to 0.4, which means long positions are less than short position and is in between 0.3 to 0.4 ratio, market has shown the reversal and market has came up. Similarly when the ratio is between 3.9 to 4.5, that means long positions are higher than short positions and is in between 3.9 to 4.5 ratio, market has shown the reversal and came down. This long to short ratio is of Index Future positions. This is not a written rule but it does have 80%-90% probability that this limits will be respected. It has proven in the past on many instances. This data can be recorded from nseindia.com on daily basis for FIIs, Prop Desk, DIIs and in any combinations in them. I personally give lot of importance to FIIs LS (Long- Short) ratio. and keep watch on prop desk data too. This gives lot of help to understand the undercurrents of the market.
Currently, as on 18th May 2024, Fiis LS ratio is around 0.39, It touched 0.36 on 16th May 2024 and shown reversal on 17th May 2024.Currently Fiis are carrying around 407071 Index future short positions out of which around 313232 Index future short positions are big short positions that means more than around 1.75% of the total future index positions are made in single day. This if you calculate in terms of open interest, then it comes out around 7500 open interest (open contracts) made in single day. This 1.75% figure also come with the observation from the past records and do not have any mentioned record by any certified analyst. Fiis are currently carrying 160596 Index Future long positions out of which 107248 are big future long positions (logic is same for the word 'big'). Below table will give you idea of LSR (LONG SHORT RATIO) movement.
Data Source: nseindia.com, Analysis: personal data records
This data is useful for those who wish to read the undercurrent of the market. With this data, unlike technical chart readers who just say If market touches this level than this will happen or that will happen, one will know the best probability of the market directions along with real support and resistances of big players. Certified Analyst use all the information of the data present along with the charts and fundamentals.
So currently if index future short positions are way higher than index future long positions which tells that big players (Fiis) are carrying bearish sentiments, and there is possibility that market can show the reversal as the limits of LSR shows 0.39. I am just suggesting the possibility here, just take the note of the possibility because on the other hand there is still room for LSR 0.30. It all depends on what is happening on coming near future.
Overall, with the above data, I only say that investors should be vigilant and enter in the dips and traders should be more cautious as national event of elections is showing tremendous impact of mood swings of smart money.
Leave your suggestions/critics/appreciation in the comment box below. Share the link if you find this blog adding any value to your existing knowledge of Indian Stock Market. Let's try to be always in profits together in the journey of creating wealth......
**Disclaimer: The data I have given is taken from the sources that I have mentioned above after each table. It is publically available data. I am not suggesting / recommending any positions in any segments of the Indian Equity Market. Please do not take any positions in any segment by just referring this data. Consult your own financial/ investment planner before investing.
HAPPY INVESTING.......
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