Foreign investors most short on India stocks since 2012

Foreign investors are the most pessimistic in over a decade on Indian stocks amid speculation over Prime Minister Narendra Modi's party winning fewer seats in the ongoing national elections than previously estimated.

Net short positions measured as the difference between the number of index futures contracts on which global funds are long to those on which they hold a short position surged to 213,224 contracts, data compiled by Bloomberg showed. The gap is the widest since data going back to 2012.

The bearish positions in the derivatives market have come at a time when overseas investors have pulled out about $4 billion from local stocks since early April, reflecting a cautious outlook about the outcome of the elections.