Key equity indices slipped into negative terrain and hit the day's low in early afternoon trade. The Nifty slipped below 12,250 and descended towards 12,200 mark.
At 12:26 IST, the barometer index, the S&P BSE Sensex, was down 77.74 points or 0.19% at 41,497.40. The Nifty 50 index was down 20.55 points or 0.17% at 12,225.25.
Investors locked profits in frontline stocks after a recent rally, which propelled key barometers to record high levels. An improving outlook on the global economy and optimism surrounding US-China trade deal had sent domestic equities to an all-time high recently.
Firmness in crude oil prices also spoiled sentiment. India is heavily dependent on oil imports for satisfying its domestic demand. A high crude price directly maps into a high trade deficit and in turn a high current account deficit (CAD). At the same time, being an important input for the aggregate economy, a crude price shock also leads to a spike in domestic inflation.
The broader market continued to outperform the benchmark index. The S&P BSE Mid-Cap index rose 0.1%. The S&P BSE Small-Cap index rose 0.38%
The market breadth, indicating the overall health of the market, was positive. On the BSE, 1188 shares rose and 1055 shares fell. A total of 178 shares were unchanged. In Nifty 50 index, 29 stocks advanced while 21 stocks declined.
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Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, jumped 7.17% to 11.28. The Nifty January 2020 futures were trading at 12,299.55, a premium of 64.7 points compared with the spot at 12,234.85.
On the options front, the Nifty option chain for 30 January 2020 expiry showed maximum call open interest (OI) of 20.13 lakh contracts at the 12,500 strike price. Massive call writing was witnessed at 12,700 strike price, which added 2.35 lakh contracts.
Maximum put OI of 34.98 lakh contracts was seen at 12,000 strike price. Significant put writing was seen at the 11,900 strike price, which added 1.96 lakh contracts.
Buzzing Index:
State-run oil marketing companies declined after crude oil prices held firm at higher levels. Brent crude oil prices firmed up on the back of trade optimism. In the commodities market, Brent crude for February 2020 settlement was up 21 cents at $68.37 a barrel. The contract rose 0.35% to settle at $68.16 a barrel during the previous trading session.
HPCL (down 1.11%), Bharat Petroleum Corporation (down 1.41%) and Indian Oil Corporation (down 0.79%) declined.
Stocks in Spotlight:
JSW Steel was down 0.22%. The steel major said that its wholly-owned subsidiary, JSW Steel (Netherlands) B.V., entered into an agreement for selling 39% out of its 49% stake held in Geo Steel LLC, a joint venture (JV) based in Georgia, to its JV partner - Georgian Steel Group Holdings. Post the completion of the aforesaid sale, JSW Steel (Netherlands) B.V. will continue to hold 10% stake in Geo Steel LLC.
Shares of NHPC fell 0.21%. NHPC informed that Unit number 2 of Bairasiul Power Station (180 MW) has been tested and commissioned after completion of Renovation and Modernization works. The commercial operation of Unit # 2 of Bairasiul Power Station shall start from 29 December 2019, the company announced in an exchange filing made on Saturday.
Adani Ports and Special Economic Zone (APSEZ) rose 0.44%. APSEZ said that its wholly-owned subsidiary, Adani Logistics (ALL), acquired 6,72,54,119 equity shares representing 40.25% stake of Snowman Logistics (Snowman) from Gateway Distriparks (GDL) at Rs 44 per equity share, aggregating to Rs 295.92 crore. The acquisition gives ALL platform to double its capacity in next 5 years.
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