Benchmarks pare losses; Nifty climbs above 18,700; VIX up 1.48%

The key equity indices reversed all the losses and traded with minor gains in the early afternoon trade. The Nifty marched above the 18,700 mark. Metal, realty and PSU bank shares advanced while oil & gas, IT and healthcare shares declined.

At 12:29 IST, the barometer index, the S&P BSE Sensex, was up 6.65 points or 0.01% to 62,875.15. The Nifty 50 index added 22.70 points or 0.12% to 18,713.05.

In the broader market, the S&P BSE Mid-Cap index slipped 0.10% while the S&P BSE Small-Cap index added 0.62%.

The market breadth was strong. On the BSE, 2,146 shares rose and 1,322 shares fell. A total of 192 shares were unchanged.

Investor sentiment took a hit after November US payrolls report instilled expectations that the US Fed would stick to its rate hike path to combat the high inflation. Nonfarm payrolls climbed more than anticipated by 263,000, while wage growth ran higher despite recessionary pressures ahead.

Meanwhile, oil prices rose sharply on Monday, thanks to relaxations of strict Covid measures in China, while the OPEC kept production steady at its latest meeting.

The Reserve Bank of India (RBI) is all set for its bi-monthly policy review with the Monetary Policy Committee (MPC) meeting starting today. The bi-monthly policy review is expected to come out on 7 December 2022. More than the quantum of rate hikes, domestic investors would watch out for the Central Bank's commentary as it ramps up its efforts to curb inflation and push growth.

On the political front, Gujarat Assembly Elections will be closely watched. The second phase of polling is being held today, 5 December 2022. The first phase of assembly polls in Gujarat was held on 1 December 2022. The results will be declared on 8 December 2022.

Derivatives:

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 1.48% to 13.65. The Nifty 29 December 2022 futures were trading at 18,844.75, at a premium of 131.7 points as compared with the spot at 18,713.05.

The Nifty option chain for the 29 December 2022 expiry showed maximum Call OI of 32.9 lakh contracts at the 19,000 strike price. Maximum Put OI of 34.6 lakh contracts were seen at 18,000 strike price.

Buzzing Index:

The Nifty Oil & Gas index fell 0.57% to 8,517.10. The index rose 0.05% in the past trading session.

Among the components of the Nifty Oil & Gas index, Adani Total Gas (down 2.5%), Hindustan Petroleum Corporation (down 1.46%), Gujarat Gas (down 1.42%), Indraprastha Gas (down 0.99%) and Reliance Industries (down 0.81%) Mahanagar Gas (down 0.76%), Bharat Petroleum Corporation (down 0.56%) were the top losers.

On the other hand, Oil & Natural Gas Corporation (up 1.38%) ,Castrol India (up 1%) and Oil India (up 0.84%) edged higher.

Stocks in Spotlight:

Adani Ports and Special Economic Zone (APSEZ) skid 0.32%. The company said that it handled a cargo volume of approximately 25.3 million metric tonnes (MMT) in November 2022, registering a growth of 2.26% from 24.74 MMT recorded in November 2021. The rise in total cargo volume factors year on year (YoY) growth of 6% in container volumes and 2% in dry bulk cargo.

Rajesh Exports declined 0.56% after the company said that Prashant Mehta, managing director (MD) of the company has tendered his resignation on 3 December 2022. He was MD of the company from 01 February 1995. He was also the chairman of risk management committee.

SpiceJet rose 2.31% after the company said its operations, safety processes and systems were found to be strong by the International Civil Aviation Organisation (ICAO). ICAO is a specialized agency of the United Nations to promote the safe and orderly development of international civil aviation around the world.

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