Foreign institutional investors have significantly increased their bearish positioning in the Indian equity market, with FIIs net selling ₹5,968.16 crore worth of index futures during the past five trading sessions of the September series. According to Business Standard, FIIs net sold 37,900 contracts of Nifty futures, taking the total short bets in index futures from 2.08 lakh contracts at the end of August expiry to 2.47 lakh contracts as of September 1. The FII long-short ratio in index futures stands at 1:10, indicating that FIIs hold 10 short positions for every long position, creating a persistently skewed short book that analysts view as a standing overhang. As per Dharmesh Bhatt, Head-Derivatives Research at Systematix Institutional Research, this represents a live bearish signal rather than a stale one, with FIIs being net sellers of futures every session since the September series opened.
The Nifty September 2026 futures closed at ₹24,048, trading at a premium of ₹150.30 points compared to the cash market's closing price of ₹23,897.70. According to Business Standard, this premium indicates positive sentiment in the futures market despite the underlying index's decline. The September 2026 F&O contracts are scheduled to expire on 29 September 2026. In the derivatives market, maximum Call and Put open interest is placed at 57,500, indicating that a short straddle has been created at the 57,500 strike. The combined premium of the straddle is around 1,500 points, translating into a 56,000-59,000 range for the September series, with the PCR at 1.1, suggesting neutral positioning.
The Nifty 50 index advanced 24.25 points or 0.10% to close at ₹23,897.70 in the latest trading session, as reported by Business Standard. This represents a continuation of the upward trajectory that began with a 2.3% decline or 548 points to 23,787 as of Wednesday's low, and trading 0.8% lower at 23,861 as of 10:45 AM. Over the past five trading sessions of the September series, the Nifty has declined 1.1% or 280 points. This decline was attributed to multiple factors including crude oil crossing $90 per barrel, weakness in Adani stocks, and the Federal Reserve signalling a hawkish stance. The index has formed a small bearish candle with shadows on either side, reflecting indecisiveness among market participants.
The NSE's India VIX, a gauge of market volatility expectations, dropped 6.50% to 10.60, indicating a decrease in market uncertainty expectations compared to the previous session's 1.34% decline. According to Business Standard, this decrease in volatility expectations suggests market participants are becoming more confident about near-term market conditions. The weekly RSI remains flat but above its reference line, indicating a lack of strong directional momentum. The Nifty is currently trading below its long-term 200-day moving average (200-DMA) since the breakdown on February 27, 2026. Technical experts expect the 24,000-24,400 range to remain the trading range for Nifty 50, with a decisive break on either side likely to provide a directional trend. Below this range, 23,800 will be the level to watch as the next key support, while 24,800 is likely to act as the next resistance on the upside.
In the derivatives segment, Swiggy, Reliance Industries, and Bombay Stock Exchange (BSE) emerged as the top-traded individual stock futures contracts in the F&O segment of the NSE, as reported by Business Standard. This concentration in these three major stocks suggests focused institutional and retail interest in these blue-chip names. The September 2026 F&O contracts will expire on 29 September 2026, providing a clear timeline for current positioning strategies. Market analysts expect volatility to rise on either side of the market in September based on the F&O and historical market data, with the persistently skewed short book suggesting that every rally into resistance tends to attract fresh shorts rather than short-covering, capping upside potential.
