FIIs greeted RBI governor Raghuram Rajan's surprise of 50 bps cut in interest rates with heavy selling in cash, and shorts in derivatives.
FIIs sold Rs 1,112 crore worth of shares in cash market and Rs 520 crore worth of index futures on Tuesday, according to NSE data.
FIIs bought Rs 3,614 crore worth of index options on September 29 which analysts attribute to bearish positions in NSE index and NSE Bank index.
Data shows that FIIs are looking to use the rate cut led rise as another opportunity to sell; from a net perspective shorts were added yesterday, said analysts.
"There is just too much going on globally for a sustained rise to materialise. Fed, China, Europe, EM, VW, Glencore or something else may keep at tab on bulls," a derivative analyst at a foreign broker told Reuters
"Stock futures are still net long. Index options suggest FIIs are prepared for any downside surprises," Akshata Deshmukh derivatives strategist at Dolat Capital Market Pvt Ltd said
Despite all measures by the government and the RBI, India is not as safe and attractive, as it was last year, traders said.