Indian markets are recovering ahead of Budget 2025, but FIIs remain cautious with short positions in the future. Traders expect higher volatility due to upcoming Budget announcements.

On 31 January, FIIs sold ₹1,189 crore worth of equities, while DIIs bought ₹2,232 crore, supporting the market, according to exchange data.

FIIs maintained a net short position of 3.1 lakh contracts in index futures. This was a marginal decline from 3.5 lakh contracts earlier in the week, indicating some short covering in recent sessions.

Despite some short covering, FIIs remained cautious. Institutional investors are waiting for Budget announcements before making aggressive moves in the market.

Intraday volatility is expected as institutional investors adjust their positions. The market's direction will depend on Budget announcements and how investors respond. Source Money Control