FPIs Trim Bearish Bets, Boost Indian Market Amid US Tariff Cuts

• Foreign portfolio investors (FPIs) reduced short positions in index futures by nearly 30,000 contracts, lowering net short exposure to 83% from 88%.
• FPIs made their third-largest cash market purchase in three months, buying ₹5,236 crore worth of equities.
• The rupee saw its best single-day gain in over seven years, and Nifty surged nearly 3% after the US cut tariffs on Indian goods.
• US tariffs on Indian goods are set to decrease from 50% to 18%, expected to boost foreign inflows and strengthen the rupee.
• Despite improved fundamentals, Indian equities remain relatively expensive compared to some Asian peers, though valuations have corrected from peak.

Why It Matters: FPIs are reducing bearish positions and increasing investments in India, driven by US tariff cuts and a stronger rupee.