Mumbai, Feb. 5 -- Foreign portfolio investors (FPIs) had amassed a record 153,404 short contracts on Nifty and Bank Nifty futures as of Tuesday, a day before the Reserve Bank of India's Monetary Policy Committee (MPC) begins its three-day meeting (5-7 February). Markets widely expect a 25-basis-point rate cut.

"These shorts are at a record high, adjusted for the change in lot size of Nifty futures, which took place at the end of January for monthly derivative contracts," said Rohit Srivastava, founder of analytics firm IndiaCharts.

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The size of these short positions signals heightened caution among FPIs. However, analysts believe a dovish MPC stance under ne...