US FEDERAL RESERVE RATE CUT HOPE
Market Sentiment Analysis Based on Open Interest Data
The data covers the period from November 3 to November 26, 2025, focusing on Nifty 50 and Nifty Bank indices. Key metrics include net open interest (OI) positions in futures and options for FIIs (Foreign Institutional Investors), DIIs (Domestic Institutional Investors), and proprietary traders, cumulative OI nets, daily variations, and cash market flows (in INR crores). Net positive OI generally signals bullish positioning (longs), while negative indicates bearish (shorts). Cash inflows (positive) suggest buying support.
Overall Trends (November 3–26, 2025)
Index Performance: Nifty 50 rose ~1.7% overall (from 25,763 to 26,205), with Nifty Bank up ~2.4% (58,101 to 59,528). However, it experienced volatility: a dip from 26,192 (Nov 20) to 25,884 (Nov 25, -1.2% drawdown), followed by a sharp 1.24% rebound on Nov 26.
Futures OI: Cumulative net OI remained predominantly negative (avg. -77,000 contracts), indicating net short positioning across participants. FIIs were the largest shorts (total net -2.43M contracts), but DIIs built longs (total +762K). This suggests FIIs drove downward pressure, offset by DII absorption.
Options OI: Highly volatile, with cumulative net flipping from positive early (+99,892 on Nov 3) to deeply negative mid-period (low -709,753 on Nov 24), then surging to +55,548 on Nov 26. FIIs net short options (total -3.51M), while proprietary traders went long (total +1.27M). Negative OI likely reflects put buildup (bearish hedging), with the late flip signaling call dominance (bullish).
Cash Flows: FIIs were net sellers (total outflow -12,447 Cr), contributing to pressure during the mid-month dip. DIIs countered with inflows (total +69,000 Cr), providing support. Correlations: Nifty close weakly positively correlated with cumulative futures OI (0.29), options OI (0.35), and FII cash (0.23), implying derivative positioning amplified but didn't fully drive price moves.
Broad Sentiment: Bearish bias mid-period due to FII selling and short buildup amid falling prices (indicating fresh shorts). However, DII buying absorbed this, preventing deeper declines. Low correlations suggest external factors (e.g., global cues) influenced the rebound.
Recent Trends (Last 5 Trading Days: Nov 20–26)
Market dipped 1.2% amid FII cash outflows (-5,869 Cr total) and deepening negative OI (futures more short, options put-heavy), pointing to bearish consolidation.
Sharp reversal on Nov 26: Both indices up >1%, FII cash inflow +4,778 Cr (first major buy in days), DII +6,247 Cr. Cumulative futures OI less negative (-57,268 vs. -77,362 prior), and options flipped positive (+55,548)—strong short covering and bullish rotation signal.
FII futures shorts reduced (from -161,697 on Nov 24 to -90,747 on Nov 26), confirming unwinding.
Suggested Market Sentiments
Short-Term (Next 1–3 Days): Bullish. The Nov 26 rebound, coupled with FII short covering, options call dominance, and synchronized cash buying, suggests momentum continuation. Watch for sustained >26,200 Nifty hold; resistance at 26,300 (recent high).
Medium-Term (Next 1–2 Weeks): Cautiously Optimistic. DII support remains robust, but FII net selling persists overall. If cumulative futures OI turns positive, it could confirm uptrend; persistent negatives may cap gains at 26,500.
Risks: Renewed FII outflows (e.g., > -2,000 Cr/day) could trigger pullback to 25,800 support. Volatility high—options variation spiked +479,742 on Nov 26 (call buying?).
Visual Trends
