Divergence in foreign and local bets hints at a volatile future
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Mumbai: A tug-of-war between overseas fund managers and domestic individuals over Dalal Street's near-term prospects is at play. Foreigners are holding record bearish derivative bets on the Nifty as uncertainty over the outcome of the general elections is prompting them to hedge their portfolios here. Signs of renewed global investor interest in battered Chinese and Hong Kong stocks could also be driving them to be cautious about Indian equities, said analysts. Crossing swords with the sophisticated foreign institutions are domestic individual investors, who have created aggressive bullish wagers, underscoring their continued optimism over the market outlook. The Nifty has gained 2.5% in the past week while Foreign Portfolio Investors (FPIs) retained their elevated short positions in index futures and options through the third week of May. According to analysts, the net bearish positions of FPIs in index futures stood at a record 2.46...