Nifty tops 12,200; breadth negative

Key equity indices scaled fresh record high levels ahead of today's GST Council meet. At 12:29 IST, the barometer index, the S&P BSE Sensex, was up 114.64 points or 0.28% at 41,466.81. The Nifty 50 index was up 31.85 points or 0.26% at 12,196.85.

The S&P BSE Mid-Cap index was down 0.41% while the S&P BSE Small-Cap index was up 0.04%.

The market breadth was negative. On the BSE, 1060 shares rose and 1136 shares fell. A total of 151 shares were unchanged. In Nifty 50 index, 27 stocks advanced while 23 stocks declined.

Finance Minister Nirmala Sitharaman will chair the 38th goods and services tax (GST) Council meeting today, 18 December 2019. Investors are keenly waiting for the outcome of the meeting to get any cues on the government's plan to overcome revenue shortfall. Concerns on fiscal path may influence government to hike tax slabs.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, tumbled 5.32% to 12.70. The Nifty December 2019 futures were trading at 12,138.45, a premium of 33.6 points compared with the spot at 12,172.05.

On the options front, the Nifty option chain for 26 December 2019 expiry showed maximum call open interest (OI) of 22.05 lakh contracts at the 12,200 strike price. Call writing was witnessed at 12,200 strike price, which added 2.86 lakh contracts. Maximum call unwinding was seen at the 12,000 strike price, which shed 77,850 contracts.

Maximum put OI of 47.19 lakh contracts was seen at 12,000 strike price. Significant put writing was seen at the 12,200 strike price, which added 4.96 lakh contracts. Put unwinding was witnessed at 11,900 strike price, which shed 1.39 lakh contracts.

The option chain indicates that Nifty will stay between 12,000 and 12,200 in December expiry. The December contracts expire on Thursday, 26 December 2019.

Buzzing Index:

Cigarette stocks were in demand after Puducherry CM reportedly said that cess hike on cigarettes was not on today's GST council meet's agenda.

Godfrey Phillips (up 2.76%), ITC (up 1.41%) and VST Industries (up 1.02%) advanced.

Stocks in Spotlight:

Persistent Systems gained 0.93% to Rs 679.20 after HDFC mutual fund hiked its stake in the IT company by 2.03% to 7.20% on 16 December 2019. The disclosure was made after trading hours yesterday, 17 December 2019.

Shares of Castrol India were trading 1.44% lower at Rs 130. The firm entered into a strategic partnership with Renault India for supplying after-sales engine oil lubricants with effect from 1 January 2020. The product range will be available across Renault dealership.

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