India is poised to transition into a stock-pickers market this June, as domestic investors selectively allocate funds to specific sectors. This trend is occurring alongside bearish positions held by foreign investors, which are tempering broader market gains, according to two brokerages.
The Nifty 50 index concluded the May derivatives series at 23,913.7 points, showing minimal change after experiencing months of volatility driven by the Iran war and subsequent energy shocks impacting the markets.
For the upcoming June derivatives series, brokerage Systematix anticipates that the Nifty will range between 23,000 and 25,000 points. In contrast, Axis Direct projects a narrower range of 23,000 to 24,500 points, identifying 24,000 as a crucial pivot point.
The May series marked a significant shift in “market character,” moving from a recovery fueled by short covering to new positioning at elevated levels, as per Systematix. The blue-chip index has recovered but has faced resistance near the 50-day moving average.
Despite share benchmarks being rangebound, investors are reallocating their funds among sectors, fostering a favorable environment for specific and positional trades, the brokerage noted.
Rollover data from the derivatives market supports this analysis. The overall market-wide rollover for the May series reached 94.2%, surpassing three-month and six-month averages, indicating strong participation. Meanwhile, India’s broader small and mid-cap stocks outperformed the benchmark during this latest series.
The Nifty’s rollover has declined to 70.0% from 71.4% in April, falling below both the three- and six-month averages, which suggests a decrease in momentum. Likewise, Nifty Bank’s rollover dropped to 75.3% from 78.6%.
Foreign investors are maintaining high levels of index shorts, limiting potential market upside. Conversely, local investors are exhibiting bullish sentiment, according to both brokerages.
The brokerages have identified the metals, pharmaceuticals, and power sectors as areas with substantial open-interest-backed accumulation. Additionally, the IT sector may be positioned for a significant short-covering rebound if existing crowded shorts begin to unwind.
Published on May 27, 2026.
