Key benchmark indices were trading with modest gains in early afternoon trade. The Nifty was trading below 12,300 mark. At 12:17 IST, the barometer index, the S&P BSE Sensex, was up 60.16 points or 0.14% at 41,734.08. The Nifty 50 index was up 25 points or 0.2% at 12,284.70.
The broader market was trading firm. The S&P BSE Mid-Cap index was up 0.37% while the S&P BSE Small-Cap index was up 0.24%.
The market breadth was positive. On the BSE, 1152 shares rose and 979 shares fell. In Nifty 50 index, 37 stocks advanced while 13 stocks declined.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 0.8% to 12.22. The Nifty December 2019 futures were trading at 12,278.30, a discount of 6.65 points compared with the spot at 12,284.95.
On the options front, the Nifty option chain for 26 December 2019 expiry showed maximum call open interest (OI) of 31.57 lakh contracts at the 12,300 strike price. Call writing was witnessed at 12,300 strike price, which added 10.6 lakh contracts. Call unwinding was seen at the 12,000 strike price, which shed 64,725 contracts.
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Maximum put OI of 41.22 lakh contracts was seen at 12,200 strike price. Significant put writing was seen at the 12,250 strike price, which added 8.07 lakh contracts. Put unwinding was witnessed at 11,900 strike price, which shed 90,375 contracts.
The option chain indicates that Nifty will stay between 12,200 and 12,300 in December expiry. The December contracts expire on Thursday, 26 December 2019.
Economy:
The Reserve Bank of India (RBI) on on Thursday (19 December) said it will simultaneously buy and sale government securities worth Rs 10,000 crore each on 23 December under its open market operations (OMO), a move aimed at managing the yields. RBI said it will buy Rs 10,000 crore of 6.45% government bonds maturing in 2029 and simultaneously sell Rs 10,000 crore of short-term bonds maturing in 2020.
Meanwhile, the minutes of the last meeting of RBI's Monetary Policy Committee (MPC) were released on Thursday (19 December). RBI's MPC at its last meeting on 5 December 2019 decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.15%. Consequently, the reverse repo rate under the LAF remained unchanged at 4.90%, and the marginal standing facility (MSF) rate and the bank rate at 5.40%.
According to the minutes, the RBI remains concerned about the slower pace of rate cut transmission in the economy while the sudden spurt in food inflation, though seasonal, seems to have put policy makers at the central bank on alert.
RBI Governor Shaktikanta Das said that the impact of recent counter-cyclical measures taken by the government was starting to play out, while stressing that it was imperative that monetary and fiscal policies should work in close coordination. The MPC, which decides on the benchmark policy rate of RBI, comprises six members, three from the central bank and three others appointed by the central government.
The yield on 10-year benchmark federal paper tumbled to 6.597% at 12.31 IST compared with 6.746% at close in the previous trading session.
Stocks in Spotlight:
NMDC rose 0.32% after the Ministry of Coal allocated two coal blocks to NMDC for commercial mining in Hazaribagh district of Jharkhand. Both these blocks are located at Hazaribagh District of Jharkhand. The Rohne coal block has extractable reserves of 191 million tonnes and planned production capacity of 8 million tonnes per annum. The Tokisud North coal block has extractable reserves of about 52 million tonnes of thermal coal and planned production capacity of 2.32 million tonnes per annum.
Tata Chemicals gained 2.21%. Tata Chemicals said the company, through its wholly-owned subsidiary, Valley Holdings, Inc., has acquired the remaining 25% partnership interest from The Andover Group, Inc. in Tata Chemicals (Soda Ash) Partners Holdings. With this acquisition, the company has increased its ownership in Tata Chemicals (Soda Ash) Partners, the soda ash producing operating entity, from 75% to 100%. For the year ending March 2019, TCSAP had a turnover of $ 465.5 million and an EBITDA of $ 100.7 million.
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