FPIs may cut bearish bets, releasing bulls on D-Street today following BJP’s exit poll surge

According to data from Nuvama Research, FPIs presently hold a significant amount of negative positions in index futures, particularly in the Nifty, valued at around $2.8 billion or Rs 23,400 crore.

The direction of the market on Monday will largely depend on how much FPIs decide to reduce these negative bets before the vote count on Tuesday (June 4).

Majority of analysts believe that the exit polls released on Saturday could prompt overseas investors to cover a significant portion of these negative bets, potentially leading to a rise in benchmark indices like the Sensex and Nifty by around 2-3 percent, reports Share Price India.

Share Price India reported, citing experts' predictions, that if the current BJP-led NDA government continues with a strong majority, there could be significant buying activity in the market on Monday, potentially driving the Nifty up by 700-800 points and pushing it to new highs in the next few days.

Despite uncertainties in the market due to the Lok Sabha elections and shifts in investment preferences towards China, domestic flows have helped stabilize the market, as per reports.

However, there has been nervousness among traders, reflected in the significant increase in the Volatility Index (VIX) to a two-year high of 24.6, Share Price India reported.

While FPIs have hiked their negative bets in index futures, they also hold positive bets in single stock futures, and high net worth individuals (HNIs) and retail traders, in addition, have increased their positions in stock futures significantly, as per reports.

However, market experts believe that despite the excitement surrounding the national election results, the market may face challenges in maintaining its bullish momentum in the short term, according to reports.