Priyanka Tiwari
Share
Indian equities surged on Friday, recovering a major portion of their recent losses. The rally was driven by aggressive short-covering from foreign institutional investors (FIIs) and renewed optimism following the US administration’s 90-day suspension of additional trade tariffs.
The Sensex jumped over 1,400 points, while the Nifty 50 reclaimed the 22,700 mark, reversing part of the steep decline seen earlier this month.
FII Derivative Positioning Reversal Sparks Rally
A significant factor behind the rebound was a sharp shift in FII index futures positioning. According to derivatives data:
FIIs were net short by nearly 200,000 contracts just before March 4.
This number dropped to 30,000 by mid-March.
After the latest market correction, FIIs added back 115,000 short contracts.
Though not at peak short levels, the current positioning provided enough fuel for a broad-based market recovery.
Technical Rebound from April Lows
Markets also benefited from technical support. The Nifty had fallen from its March 25 peak of 23,869 to a low of 21,743 on April 7. A standard 61% retracement of such a fall places resistance around 23,070—a key level now closely watched by traders.
“If the Nifty tops out at that level, it could mark the continuation of the broader correction,” noted a market strategist.
US Tariff Pause Boosts Global Sentiment
Investor mood was also lifted by the US government's decision to pause its tariff plans for 90 days, easing trade tensions. This development supported risk appetite globally and contributed to Friday’s rally across asset classes.
Pre-Holiday Risk Aversion Affects Trader Positioning
With two trading holidays in the upcoming week—Ambedkar Jayanti on Monday and Good Friday—traders are showing caution in holding large positions. “During extended breaks, market reactions to global news become riskier,” said a derivatives expert.
Market Outlook: Watch the 23,070 Resistance Level
All eyes now turn to the 23,070 mark on the Nifty. A decisive breakout above this level could indicate a resumption of the uptrend. However, failure to breach it would confirm a lower top, signaling continuation of the bearish phase.
Read More: Changing Jobs? EPFO Makes PF Transfer Easier With New Rules in 2025
