🌅 FII/DII Morning Report — Wed, 3 Jun, 2026

FSR (Flow Strength Ratio): Range -1 to +1

Measures how one-sided FII's futures buying vs selling was — not the absolute size but the relative aggression. Two sessions with identical net contracts can have very different FSR values depending on total activity.

Positive = FII bought more contracts than sold (bullish flow)

Negative = FII sold more contracts than bought (bearish flow)

Strength: >=0.30 Strong | >=0.15 Moderate | >=0.05 Weak | <0.05 Neutral

Reliability: Nifty most reliable → BankNifty → MidCap Nifty → FinNifty and NiftyNext50 least reliable. Stock futures is a broad signal only — individual stock breakdown not available.

OFR (OI Flow Ratio): Range -1 to +1

Measures how a participant's accumulated long and short positions shifted compared to the previous session — not how much they traded today but how their total positioning changed.

Positive = participant adding longs or closing shorts (bullish positioning shift)

Negative = participant adding shorts or closing longs (bearish positioning shift)

Strength: >=0.30 Strong | >=0.15 Moderate | >=0.05 Weak | <0.05 Neutral

Caution: Futures OFR is especially misleading for FII because portfolio hedging inflates their futures positions. For DII, Client, and Pro, futures OFR is more likely directional but still less reliable than options Combined OFR. Always prefer options Combined OFR over futures OFR when they conflict.

Combined OFR: Range -1 to +1

Merges Call OFR and Put OFR into one unified options signal per participant. Shown for options rows only — futures rows show dash because futures have only one OFR value.

When Call and Put OFR agree — high confidence directional signal.

When Call and Put OFR conflict — dominant side wins but with reduced conviction. The conflict itself is meaningful.

Put OFR sign is automatically flipped so positive always means bullish — consistent with calls and futures.

Strength: >=0.30 Strong | >=0.15 Moderate | >=0.05 Weak | <0.05 Neutral

Signals:

Long Buildup = OI up + Net Buy → fresh longs added, bullish

Short Buildup = OI up + Net Sell → fresh shorts added, bearish

Short Covering = OI down + Net Buy → shorts being closed, bullish

Long Unwinding = OI down + Net Sell → longs being closed, bearish

Conviction Score (S1+S2+S3): Range -3 to +3

Three independent FII signals combined — futures positioning shift, options positioning shift, and actual cash deployment.

S1 = Index Futures OFR → >+0.05 bullish | <-0.05 bearish | else neutral

S2 = Index Options Combined OFR → same thresholds

S3 = FII Cash Net vs dynamic threshold (75th pctile of past 1yr flows)

+3 Strong Bullish | +2 Moderate Bullish | +1 Weak Bullish | 0 Neutral

-1 Weak Bearish | -2 Moderate Bearish | -3 Strong Bearish

Hedging Warning: fires when S1=S2 but S3 contradicts — FII using derivatives to hedge equity portfolio, not a directional bet. Do not treat conviction score as directional when active.

Battle Table:

Positive net = net long (bullish) | Negative net = net short (bearish)

Neutral = less than 2% directional bias

Aligned = same direction as FII | Opposed = opposite to FII

★ = Dominant participant (largest absolute net position)

When Client Opposed to FII → historically FII tends to be correct at inflection points.

💰 CASH MARKET (02-Jun-2026)

FII: Buy ₹16,956 Cr | Sell ₹25,319 Cr | Net -₹8,363 Cr ▼

DII: Buy ₹22,509 Cr | Sell ₹12,919 Cr | Net +₹9,589 Cr ▲

Combined Net: +₹1,226 Cr

Participant Long Short Net Direction vs FII

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FII 24,538 254,634 -230,096 Short — ★

DII 65,965 33,084 +32,881 Long Opposed

Client 269,410 82,885 +186,525 Long Opposed

Pro 45,586 34,896 +10,690 Long Opposed

📊 INSTRUMENT WISE FUTURES SIGNAL (02-Jun-2026)

Note: Net Contracts = Today's buy contracts - today's sell contracts. Positive = FII bought more than sold. Negative = FII sold more than bought.

OI Change = Change in total open interest vs previous day. Positive = new contracts added (OI increased). Negative = contracts squared off (OI reduced).

Instrument Net Contracts OI Change FSR Strength Signal Price & Change

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INDEX -6,916 +2,348 -0.15 Weak Bearish Short Buildup —

NIFTY -7,619 +7,927 -0.23 Moderate Bearish Short Buildup 23,483.55 +100.95 (+0.43%)

BANKNIFTY +814 -5,432 +0.06 Weak Bullish Short Covering 53,714.65 +71.55 (+0.13%)

FINNIFTY -42 +34 -0.62 Strong Bearish Short Buildup 24,861.25 -147.20 (-0.59%)

MIDCPNIFTY -68 -182 -0.07 Weak Bearish Long Unwinding 14,240.45 -24.40 (-0.17%)

NIFTYNXT50 -1 +1 -0.08 Weak Bearish Short Buildup 70,115.80 +193.95 (+0.28%)

STOCK +95,017 -88,113 +0.12 Weak Bullish Short Covering —

👥 PARTICIPANT OI (02-Jun-2026)

Note: All participant OI data is combined across all expiries — NSE F&O data only. Not expiry specific. Current month contracts are the most liquid — majority of activity happens there — data can be used accordingly.

Conviction Score is available for FII only. For DII, Client, and Pro — use options Combined OFR as their primary directional signal. Futures OFR is especially misleading for FII due to portfolio hedging — less so for DII, Client, and Pro who are more likely directional.

Note: Net OI = Long OI - Short OI. This is NOT daily buy/sell — it is the total accumulated position. Positive = longs are more than shorts. Negative = shorts are more than longs.

FII negative Net OI does not always mean FII is heavily bearish — FII may use index futures to hedge their equity portfolio. However if options Combined OFR also turns bearish simultaneously, it is genuine directional conviction, not hedging. Always cross-check with options Combined OFR and FII Conviction Score before concluding.

Participant Net OI OFR Strength

FII -2,30,096 -1.00 Strong Bearish

DII +32,881 -0.45 Strong Bearish

Client +1,86,525 +1.00 Strong Bullish

Pro +10,690 -0.59 Strong Bearish

Note: Net OI = Long OI - Short OI. This is NOT daily buy/sell — it is the total accumulated position. Positive = longs are more than shorts. Negative = shorts are more than longs.

FII negative Net OI does not always mean FII is heavily bearish — FII may use stock futures to hedge individual stock positions. However if options Combined OFR also turns bearish simultaneously, it is genuine directional conviction. Always cross-check with options Combined OFR and FII Conviction Score before concluding.

Participant Net OI OFR Strength

FII +7,34,817 +1.00 Strong Bullish

DII -41,73,443 -0.58 Strong Bearish

Client +29,37,778 -0.84 Strong Bearish

Pro +5,00,848 -0.27 Moderate Bearish

Note: Call Net OI = Call Long - Call Short. Positive = net long calls (bullish). Negative = net short calls (bearish).

Put Net OI = Put Long - Put Short. Positive = net long puts (bearish). Negative = net short puts (bullish).

Always prefer Combined OFR for options — it gives the complete directional picture.

Participant Call Net OI Call OFR Put Net OI Put OFR Combined OFR Combined Strength

FII -2,79,783 -0.05 +4,95,102 -0.01 -0.03 Neutral

DII +7,221 +1.00 +23,860 +1.00 +1.00 Strong Bullish

Client +2,91,940 +0.01 -7,24,012 -0.05 -0.04 Neutral

Pro -19,378 +0.00 +2,05,051 +0.12 +0.06 Weak Bullish

Note: Call Net OI = Call Long - Call Short. Positive = net long calls (bullish). Negative = net short calls (bearish).

Put Net OI = Put Long - Put Short. Positive = net long puts (bearish). Negative = net short puts (bullish).

Always prefer Combined OFR for options — it gives the complete directional picture.

Participant Call Net OI Call OFR Put Net OI Put OFR Combined OFR Combined Strength

FII -77,593 +0.16 +42,649 -0.23 -0.07 Weak Bearish

DII -2,15,324 -1.00 +25,345 +1.00 +0.00 Neutral

Client +6,58,577 +0.19 -3,23,272 -0.01 +0.18 Moderate Bullish

Pro -3,65,660 +0.23 +2,55,278 +0.10 +0.16 Moderate Bullish

S1 Futures OFR : -1 (Bearish)

S2 Options OFR : +0 (Neutral)

S3 Cash Market : -1 (Threshold: ₹3,800 Cr)

Total : -2/3 → Moderate Bearish

Hedging Warning : Not Active

Note: Conviction Score is FII only. For DII, Client, and Pro — use options Combined OFR as their primary directional signal. Futures OFR is especially misleading for FII due to portfolio hedging — for other participants it is more likely directional but options Combined OFR remains the stronger signal.

FII sold ₹8,363 Cr in cash while simultaneously building short index futures positions (Short Buildup with Moderate Bearish FSR on Nifty) — this is genuine directional bearishness, not hedging, because index options Combined OFR remained neutral rather than turning bullish to offset the shorts. The conviction score of -2 (Moderate Bearish) reflects S1 and S3 both bearish while S2 stayed neutral. However, stock futures tell a different story: FII covered shorts there (Short Covering with Weak Bullish FSR) and holds a net long of +734,817 contracts, meaning FII's actual equity exposure remains long despite the index shorts — this is portfolio hedging, not a directional bearish bet. DII absorbed FII's selling with +₹9,589 Cr in cash, providing institutional support, while clients remained heavily long in index futures (+186,525 net), directly opposed to FII's index shorts.

Two consecutive sessions of FII selling (Monday -₹3,912 Cr, Tuesday -₹8,363 Cr) totaling -₹12,275 Cr represents a deliberate distribution pattern, not routine rebalancing. DII's matching accumulation of +₹14,698 Cr across the same two days shows domestic institutions are buying into FII's exit, creating a structural floor. The week's combined net of +₹2,424 Cr (FII out, DII in) indicates a rotation from foreign to domestic capital rather than a market-wide selloff.

FII entered the week already positioned short in index futures and has now extended that positioning across two consecutive cash selling sessions with building conviction. The pattern is established: FII is reducing index exposure while maintaining long stock positions, DII is stepping in as the buyer, and clients remain the structural long. This is not a panic or a reversal — it is a deliberate rebalancing with clear institutional roles. Today's session will test whether FII continues the distribution or whether the DII support and client positioning create a floor that forces covering.

All metrics are for informational and analytical purposes only. Signals reflect past positioning and do not guarantee future market direction. This report reflects prior day data — it is not live data, as exchanges do not provide FII/DII data in real time. Past data does not reflect future directional activity of FII/DII. Do your own research before making any trading or investment decisions. This is not financial advice. Always consult a SEBI registered financial advisor before taking any decision.