Barometers hover near day's high; VIX tumbles 3%

The Sensex and the Nifty were hovering near the day's high in early afternoon trade. Sentiment was upbeat as the central government yesterday issued new guidelines for opening up of more activities in areas outside the containment zones. Encouraging macroeconomic data and positive global cues also supported buying.

At 12:25 IST, the barometer index, the S&P BSE Sensex, surged 564.27 points or 1.48% at 38,632.59. The Nifty 50 index added 157.35 points or 1.4% at 11,405.

The broader market lagged the benchmarks. The S&P BSE Mid-Cap index was up 0.88% while the S&P BSE Small-Cap index was up 1.28%.

The market breadth was strong. On the BSE, 1480 shares rose and 877 shares fell. A total of 146 shares were unchanged.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, slumped 3.73% to 18.8. The Nifty October 2020 futures were trading at 11,421.35, at a premium of 15.75 points compared with the spot at 11,405.6.

The Nifty option chain for 1 October 2020 expiry showed maximum call open interest (OI) of 71.43 lakh contracts at the 11,500 strike price. Maximum put OI of 73.3 lakh contracts was seen at 11,300 strike price.

The Nifty option chain for 29 October 2020 expiry showed maximum Call OI of 18.04 lakh contracts at the 11,500 strike price. Maximum Put OI of 37.71 lakh contracts was seen at 10,500 strike price

COVID-19 Update:

India reported 9,40,705 active cases of COVID-19 infection and 98,678 deaths while 52,73,201 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Economy:

The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) increased from 52 in August to 56.8 in September, signalling back-to-back improvements in the health of the sector. Moreover, the latest reading was the highest in over eight-and-a-half years.

The output for India's eight core industries contracted for the sixth straight month, dropping 8.5% in August 2020. The production of eight core sectors had contracted 0.2% in August 2019, showed data released by the Commerce and Industry Ministry on Wednesday. Barring coal and fertiliser, all sectors crude oil, natural gas, refinery products, steel, cement and electricity recorded negative growth in August 2020.

Buzzing Segment:

Shares of oil and gas companies were in action after the government announced changes to the domestic natural gas prices for the period October 2020 to March 2021. The price of gas, which is used to generate electricity, make fertiliser and CNG for automobiles, has been cut to $1.79 per million British thermal unit (mmbtu) for six months beginning October 1 from the current $2.39. The rate paid to producers of new gas from difficult fields such as deepsea has also been cut to $4.06 per mmBtu from $5.61.

ONGC fell 1.01% to Rs 68.60 while Oil India declined 1.45% to Rs 88.45.

Mahanagar Gas added 4.81% to Rs 870, Indraprastha Gas rose 2.38% to Rs 396.25 and Gujarat Gas gained 1.72% to Rs 313.

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