A Market in Flux
The Indian stock market, as reflected by the Nifty 50 and Nifty Bank indices, experienced significant volatility in May 2025, driven by divergent institutional activities. Data from the National Stock Exchange (NSE) reveals a tug-of-war between Domestic Institutional Investors (DIIs), Foreign Institutional Investors (FIIs), and proprietary traders (PROs).
With the Nifty 50 closing at 25,104 on May 10, 2025, and the chart showing a current price of 25,104.25 as of June 11, 2025, the market appears to be at a critical juncture.
This paper delves into the institutional flows, daily variations, and technical levels to forecast probable Nifty 50 movements.
Institutional Dynamics –
FIIs on the Sell Side, DIIs Holding the Fort The NSE data from May 2025 paints a clear picture of institutional behavior. FIIs were consistent net sellers in the futures index, with a cumulative net position of -69,100 by May 10, 2025, and daily selling ranging from -51,312 to -106,988 over the period. This bearish stance from FIIs, likely driven by global uncertainties or profit booking, exerted downward pressure on the Nifty 50.
In contrast, DIIs remained net buyers, with a cumulative position of 39,527 by May 10, absorbing much of the FII selling. However, their buying intensity fluctuated, peaking at 45,236 on May 3 but dropping to 9,789 on May 27.
PROs showed mixed activity, with a cumulative net position of -15,603 in futures, indicating cautious participation. The options market further amplified this divergence, with FIIs and PROs swinging between heavy buying and selling, reflecting hedging and speculative strategies. This institutional push-and-pull set the stage for a volatile Nifty 50 trajectory.
Index Movements and Technical Insights –
A Market Seeking Direction
The Nifty 50 index fluctuated between 24,609 (May 22) and 25,104 (May 10) during the period, while the Nifty Bank index moved between 54,941 and 56,629. The chart from June 11, 2025, shows the Nifty 50 at 25,104.25, with key resistance levels (R1 at 25,183, R2 at 25,263) and support levels (S1 at 25,039, S2 at 24,975) clearly marked. The “Sell Zone” between 25,263 and 25,280 suggests potential profit booking, while the “Buy Zone” between 24,832.96 and 24,831 indicates a strong support base. The lower indicators, such as the Relative Strength Index (RSI) at 61.83 and the Stochastic RSI, point to a neutral to slightly overbought condition, hinting at consolidation. The daily index futures variation for FIIs turned positive on May 6 (7,145) but reverted to negative territory by May 10 (-2,529), reflecting indecision. This technical setup, combined with institutional flows, suggests the Nifty 50 may test support levels if FII selling persists, but DII buying could cap downside risks.
Probable Nifty 50 Movement –
A Cautious Uptrend with Downside Risks
Given the data and technical levels, the Nifty 50 is likely to experience a cautious uptrend in the near term, provided it holds above the 25,039 support (S1). The consistent DII buying provides a buffer against FII selling, and the positive cumulative options activity by PROs (47,417 by May 10) indicates some bullish sentiment in the derivatives market. However, the heavy FII selling in futures and the proximity to the “Sell Zone” (25,263–25,280) suggest that upward momentum may be capped unless global cues turn favorable. If the Nifty 50 breaks below 25,039, it could test 24,975 (S2) or even 24,832.96 (Buy Zone), where buying interest might emerge. Conversely, a breakout above 25,263 could push the index toward 25,500, though such a move would require a significant shift in FII behavior. The Nifty Bank index, closely correlated, may mirror this trend, with 56,629 acting as a key resistance.
Conclusion:
Balancing Optimism with Caution
The Nifty 50’s trajectory in June 2025 hinges on the interplay between institutional flows and technical levels. While DIIs provide stability, FII selling remains a headwind. Investors should watch the 25,039 support closely, as a breach could signal a deeper correction, while a sustained move above 25,263 may open the door for a bullish run.
Anish Jagdish Parashar
Indirect tax india research
Disclaimer: Content reflects author’s views; For trading and investment purposes consult your financial advisor.
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