Benchmarks bounce back; NBFCs correct

Key barometers bounced back in early afternoon trade as buying emerged at lower levels. Shares of non-banking financial companies (NBFCs) witnessed selling pressure. The Nifty hovered around 11,600 levels. At 12:23 IST, the barometer index, the S&P BSE Sensex, was up 10.80 points or 0.03% at 39,100.83. The Nifty 50 index was up 2.35 points or 0.2% at 11,602.55.

The S&P BSE Mid-Cap index was down 0.35%. The S&P BSE Small-Cap index was up 0.1%.

On the BSE, 970 shares rose and 1265 shares fell. A total of 139 shares were unchanged. On Nifty 50 index, 21 stocks advanced while 29 stocks declined.

Finance Minister Nirmala Sitharaman on Friday, 20 September, slashed corporate tax rate to 22% without exemptions. The effective corporate tax rate after surcharge will stand at 25.17%. To further attract investment in manufacturing, local companies incorporated after October 2019 will pay tax at 15%. The government will give MAT relief for those opting to continue paying surcharge and cess at 22%. MAT has been reduced to 15% from 18.5% for companies who continue to avail exemptions and incentives. The step has significant positive implications for corporates' profitability, broader economy and market valuations.

On the derivatives front, the NSE's India VIX, a gauge of market's expectation of volatility over the near term, was down 0.01% at 16.79. The Nifty September 2019 futures were trading at 11,582.25, a premium of 13.6 points compared with the spot at 11,568.65.

On the options front, the Nifty option chain for 26 September 2019 expiry showed maximum call open interest (OI) of 29.41 lakh contracts at the 11,700 strike price. Maximum put OI of 41.94 lakh contracts was seen at 11,000 strike price. The option chain indicates that Nifty will stay between 11,000 and 11,700 in September expiry.

Most NBFCs stocks declined. Edelweiss Financial Services (down 5.58%), Bajaj Finance (down 1.82%), Bajaj Finserv (down 1.35%), LIC Housing Finance (down 1.06%), IIFL Holdings (down 0.98%), Indiabulls Housing Finance (down 0.56%) and Shriram Transport Finance Corporation (down 0.54%) were major losers from the NBFC pack.

The Nifty Financial Services index was down 1.77% at 13,320.15.

Multi Commodity Exchange of India (MCX) surged 6.09% to Rs 994.05 after a foreign brokerage firm initiated a buy call and upgraded the stock from 'equal weight' to 'over weight'. The stock hit an intraday of Rs 1030.50 which is also a 52-week high for the counter.

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