Mumbai, July 7 -- Foreign portfolio investors (FPIs) are a far cry from turning bullish on Indian shares, with the recent buying in the cash market attributable to the closing out of reverse arbitrage (arb) positions rather than fresh cash market buying, per market experts.

Reverse arb, the opposite of arbitrage, involves purchasing stock futures and selling the underlying stock to lock in the spread. When the prices of the underlier and futures converge, the profit is realised by closing out the positions-i.e. buying back the underlier and selling the futures.

Normally, stock futures tend to trade at a premium to the cash or underlying stock due to the opportunity cost-i.e., the cost of holding the underlying stock over time.

But due ...