Market Outlook for Tomorrow – 04/06/25
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Nifty Closing Snapshot: 24,542.5
DII Cash Market Activity: Net Buy ₹5,907.97 Cr
FII Cash Market Activity: Net Sell ₹2,853.83 Cr
Market Summary & Sentiment
Today’s session closed with Nifty at 24,542.5, reflecting a strong resilience despite heavy selling by Foreign Institutional Investors (FIIs). Domestic Institutional Investors (DIIs) emerged as strong net buyers with nearly ₹5,908 Cr worth of purchases, more than offsetting the FII outflows. This substantial DII support provided a cushion to the market and helped maintain bullish undertones.
Futures & Options Positioning Analysis
FII Activity: Cautious with a Bearish Tilt
- Futures Index: FIIs hold a net short position with -877 longs vs 13,211 shorts.
- Options Index: Heavy concentration in Put Longs (1.09 lakh) and Put Shorts (1.15 lakh), indicating hedging and volatility expectations. Notably, the Call Longs (34.9k) remain subdued.
- Net stance: Cautiously bearish; expect FIIs to hedge or capitalize on downside moves.
DII Positioning: Mildly Bullish
- DIIs are purely active in Index Futures (2,967 net long) and Stock Futures (29,446 shorts).
- Limited presence in Options; their directional bias is less speculative, but their aggressive cash buying signals fundamental bullishness.
Client (Retail/HNI) Activity: Aggressively Bullish
-
Net long across the board:
- Future Index Longs: 8,976
- Stock Futures Long: 59,210
- Options Index Call Longs: 8.75 lakh
- Options Stock Call Longs: 1.89 lakh
- The high % of Long Contracts (48.81%) from clients reinforces a risk-on sentiment among retail participants.
Pro (Prop Desk) View: Balanced with Volatility Strategy
- Future Index Longs: 3,144 vs Shorts: 1,276 → Mildly long
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Options Activity:
- Call Longs: 2.68 lakh
- Put Longs: -34k (short positions suggest selling volatility)
- Put Shorts: 38.6k
- Call Shorts: -6.2k
- A mix of long volatility and range-bound strategy—Pros seem to be anticipating a breakout but are positioning cautiously.
Options Open Interest Insight
- Total Long Contracts = 1.78 million vs Short = 1.78 million → Market remains evenly poised, but the higher % Wise Long (22.25%) over Short (19.34%) shows a slight bullish tilt.
- Clients and DIIs are the net buyers, while FIIs and Pros are playing defensively.
Predictions for Tomorrow – June 4, 2025
Bullish Bias, but Watch for Volatility
Given the strong DII inflows and dominant long positions from clients, the broader sentiment favors the continuation of the uptrend, possibly testing 24,650–24,700 levels.
However:
- FII short build-up in futures and defensive options play could trigger intraday volatility.
- If Nifty fails to hold above 24,480, profit booking could drag it towards 24,350 zone.
Trading Strategy
| Participant | Stance | Suggested Action |
|---|---|---|
| Retail/Clients | Bullish | Stay long with trailing stop-loss |
| FIIs | Bearish/Hedged | Monitor for any unwinding of short positions |
| DIIs | Accumulating | Positive for positional longs |
| Pros | Volatility Anticipation | Straddle/strangle setups favored |
Final Word
The market is currently riding on domestic liquidity and optimism, but global uncertainties and FII caution call for a disciplined approach. Expect range-bound movement with a bullish bias—buy the dips remains a valid strategy unless 24,350 is broken decisively.
Stay updated. Stay strategic. – Option Matrix India