Bears dominate D-Street; Nifty at 9400

Barometers slumped to hit the day's low as selling pressure intensified in early afternoon trade. The Nifty hovered around 9400 mark. The uncertainty regarding the effect of the coronavirus epidemic impacted sentiment.

At 12:33 IST, the barometer index, the S&P BSE Sensex, was down 1959.51 points or 5.75% at 32,143.97 The Nifty 50 index was down 545.45 points or 5.48% at 9,409.75.

The broader market traded with heavy losses. The S&P BSE Mid-Cap index tumbled 4.34% while the S&P BSE Small-Cap index slumped 4.56%.

Sellers outpaced buyers. On the BSE, 258 shares rose and 1,377 shares fell. A total of 76 shares were unchanged. In Nifty 50 index, 2 stocks advanced while 48 stocks declined.

On Sunday, the US Federal Reserve cut interest rates to near zero for the first time since the global financial crisis and announced sweeping measures to address coronavirus outbreak. The US central bank slashed its main policy rate by a full percentage point to between zero and 0.25% a level last seen in 2015. It also unveiled at least $700 billion in asset purchases.

The Bank of Japan (BoJ) on Monday followed the Fed's actions by announcing it aimed to double its purchases of exchange traded funds to 12 trillion yen ($112 billion) a year. However, the central bank left its key policy rated unchanged at -0.1%.

Economy:

The Government announced wholesale inflation numbers for February 2020. The annual rate of inflation, based on monthly Wholesale Price Index (WPI), stood at 2.26% (provisional) for the month of February 2020 (over February 2019) as compared to 3.1% (provisional) reported in January 2020 and 2.93% registered in February 2019.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, jumped 11.75% to 57.52. The Nifty February 2020 futures were trading at 9,341.20, a discount of 97.8 points compared with the spot at 9,439.

On the options front, the Nifty option chain for 26 March 2020 expiry showed maximum call open interest (OI) of 22.87 lakh contracts at the 12,000 strike price. Maximum call writing was witnessed at 10,000 strike price, which added 2.33 lakh contracts.

Maximum put OI of 23.83 lakh contracts was seen at 9,500 strike price. Put writing was observed at 8100 strike price which added 2.2 lakh contracts. Put unwinding was seen at 9000 strike price which shed 2.29 lakh contracts.

Buzzing Index:

The Nifty Metal index slumped 5.88% to 1,791.45, after surging 5.71% in previous trading session.

Ratnamani Metals & Tubes (down 9.71%), Tata Metaliks (down 8.83%), Jindal Steel & Power (down 8.11%), JSW Steel (down 7.77%), Vedanta (down 7.16%), Tata Steel (down 7.11%), Steel Authority of India (down 5.26%), Coal India (down 4.63%), Hindalco Industries (down 4.13%) and National Aluminium Company Ltd (down 0.82%) were top losers in metal segment.

Prices of industrial metals continued to remain under pressure as countries failed to contain COVID 19 virus which can heighten worries of a slowdown in global economic growth. China is reportedly the largest producer and consumer of industrial metals. Given such a dominant market share any slowdown in the Chinese economy has a major impact on metal prices and global markets.

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