Global stock markets witnessed a selloff amid a plunge in crude oil prices after OPEC failed to strike a deal with its allies on production cuts, adding to volatility already brought about by fears surrounding the coronavirus spread. Oil price crash is a worrying sign for the health of the world economy. Investor sentiments also turned weak amid the ongoing crisis at Yes Bank, which can impact the financial sector as a whole.
The Nifty is down 15.13% from its record high of 12,430.50 hit on 20 January 2020.
In the broader market, the S&P BSE Mid-Cap index was down 3.49% and the S&P BSE Small-Cap index was down 3.71%. The fall in both these indices was lesser than the fall in the Sensex.
Sellers outpaced buyers. On the BSE, 304 shares rose and 1988 shares fell. A total of 138 shares were unchanged. In Nifty 50 index, 4 stocks advanced while 46 stocks declined.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, jumped 15.48% to 29.61. The Nifty February 2020 futures were trading at 10,559, a premium of 2.05 points compared with the spot at 10,556.95.
On the options front, the Nifty option chain for 26 March 2020 expiry showed maximum call open interest (OI) of 29.69 lakh contracts at the 12,000 strike price. Maximum call writing was witnessed at 10,700 strike price, which added 3.54 lakh contracts. Call unwinding was seen at 11,700 strike price which shed 1.46 lakh contracts.
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Maximum put OI of 30.84 lakh contracts was seen at 11,000 strike price. Put writing was observed at 10,100 strike price which added 2.24 lakh contracts.
Buzzing Index:
Oil exploration and production companies tumbled as Brent crude prices tanked. ONGC (down 12.45%), Reliance Industries (down 9.13%) and Oil India (down 9.02%) all tumbled. Lower crude oil prices would result in decrease in realizations from crude sales for oil exploration firms.
In the commodities market, Brent crude for May 2020 settlement tanked $11.99 at $33.28 a barrel. The contract tanked 9.44% to settle at $45.27 a barrel during the previous trading session.
Saudi Arabia, the world's top oil exporter, said it would step up production from next month. The decision by state oil company, Saudi Aramco over the weekend came in response to Russia's refusal to join an OPEC plan to cut supplies. Aramco will boost its crude output significantly above 10 million barrels per day (bpd) in April, after a previous agreement to limit supplies agreed by OPEC and Russia expires at the end of March.
Meanwhile, the Indian rupee continued its downward journey on Monday, sliding below 74 mark against the US dollar.
Stocks in Spotlight:
Biocon informed that the U.S. Food and Drug Administration has accepted Mylan's biologics license application for MYL-1402O, a proposed biosimilar to Avastin (bevacizumab), for review. The FDA goal date set under the Biosimilar User Fee Act (BsUFA) is 27 December 2020. Biocon and Mylan's proposed biosimilar bevacizumab is expected to be the third biosimilar from the partnered portfolio for the cancer patients in the U.S. It is currently available in India and other developing markets. Shares of Biocon were trading 2.08% lower at Rs 303.35.
Divi's Laboratories announced that it has commenced commercial production of DCV-SEZ Unit in Visakhapatnam from 9 March 2020. Shares of Divi's Laboratories were down 3.63% at Rs 2158.90.
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