Barometers advance further; NSE VIX rises 1.50%

The Sensex and the Nifty further extended gains and hit fresh intraday high in early afternoon trade. The Nifty held above 11,850. At 12:23 IST, the barometer index, the S&P BSE Sensex, was up 274.88 points or 0.69% at 40,106.72. The Nifty 50 index was up 72 points or 0.61% at 11,858.85.

Sentiment was upbeat amid speculations that the government is mulling over changes in income tax implications on equity investment. The media reported Tuesday that existing structures of long-term capital gains (LTCG) tax, the securities transaction tax (STT) and dividend distribution tax (DTT) are being reviewed by the Prime Minister's Office in consultation with the Finance Ministry's Revenue Department and NITI Aayog. The steps are likely to be announced before or in the February Union Budget.

In broader markets, the S&P BSE Mid-Cap index was up 0.61%. The S&P BSE Small-Cap index was up 0.59%.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1287 shares rose and 865 shares fell. A total of 173 shares were unchanged. In Nifty 50 index, 33 stocks advanced and 17 stocks declined.

On the derivatives front, the NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 1.53% to 16.6725. The Nifty October 2019 futures were trading at 11,855.15, a discount of 2 points compared with the spot at 11,857.15. The October 2019 F&O contracts expire on 31 October 2019.

On the options front, the Nifty option chain for 31 October 2019 expiry showed maximum call open interest (OI) of 36.33 lakh contracts at the 12,000 strike price. Maximum put OI of 34.90 lakh contracts was seen at 11,800 strike price. The option chain indicates that Nifty will stay between 11,800 and 12,000 in October expiry.

The Nifty Auto index was down 0.52% at 8,405.80 amid profit booking after surging 4.29% in previous session. Maruti Suzuki India (down 1.06%), Bharat Forge (down 0.95%), Ashok Leyland (down 0.38%), Mahindra and Mahindra (down 0.33%), Eicher Motors (down 0.17%) and Hero MotoCorp (down 0.1%) were top losers in auto segment.

Tata Motors was down 1.33% at Rs 170.25 after advancing about 36% in the last two trading sessions after the company narrowed Q2 net loss.

Shares of Cochin Shipyard advanced 1.61% to Rs 398.45 after the company said it signed a Rs 175.70 crore contract for designing and constructing 23 hybrid-electric passenger ferries for Kochi Water Metro Project.

Avenue Supermarts (up 1.08%), HDFC Life Insurance Company (up 3.96%), HUL (up 0.12%), ICICI Lombard (up 1.18%), Jubilant Foodworks (up 0.64%), Polycab India (up 7.16%), Relaxo Footwears (up 1.97%) were some of the stocks that hit their 52-week high today.

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