Sensex, Nifty trade with small gains

Key benchmark indices traded with minor gains in early afternoon trade. Gains were capped due to weak cues from other Asian stock markets. The Nifty once again slipped below 11,700 mark. At 12:25 IST, the S&P BSE Sensex, was up 44.5 points or 0.11% at 39,780.03. The Nifty 50 index was up 14.7 points or 0.13% at 11,676.55.

In broader market, the S&P BSE Mid-Cap index rose 1.01%, outperforming the Sensex. While the S&P BSE Small-Cap index was up 0.06%.

The market breadth was negative. On the BSE, 853 shares rose and 1281 shares fell. A total of 143 shares were unchanged. In Nifty 50 index, 27 stocks advanced while 23 stocks declined.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, slumped 4.66% to 16.05. The Nifty February 2020 futures were trading at 11,673.35, a discount of 5.45 points compared with the spot at 11,678.80.

On the options front, the Nifty option chain for 27 February 2020 expiry showed maximum call open interest (OI) of 19.63 lakh contracts at the 12,500 strike price. Maximum call writing was witnessed at 11,700 strike price, which added 3.34 lakh contracts. Massive call unwinding was seen at 12,100 strike price which shed 1.41 lakh contracts.

Maximum put OI of 24.59 lakh contracts was seen at 12,000 strike price. Massive put writing was observed at 11,500 strike which added 3.62 lakh contracts. Put unwinidng was seen at 12,000 strike price which shed 1.32 lakh contracts

Buzzing Sector:

Shares of footwear makers rose as global footwear brands were hit by custom duty hike. Presenting the Union Budget 2020, Finance Minister Nirmala Sitharaman said, "Labour intensive sectors in MSME are critical for employment generation. Cheap and low-quality imports are an impediment to their growth. Special attention has been taken to put measured restraint on import of those items which are being produced by our MSMEs with better quality. Keeping in view the need of this sector, customs duty is being raised on items like footwear and furniture." Accordingly, the customs duty on footwear was hiked to 35% from 25%. The duty on parts of footwear was increased to 20% from 15% earlier.

Mirza International (up 1.73%), Bata India (up 0.33%) and Relaxo Footwear (up 0.19%) were top gainers in footwear segment.

Stocks in Spotlight:

Shares of NMDC were trading 1.57% higher at Rs 106.75. PSU miner announced production and offtake numbers for the month of January 2020. NMDC's production remained constant at 3.31 MT on YoY basis. Sales declined 3.58% to 2.96 MT in January 2020 as against 3.07 MT reported in January 2019.

Shares of Tata Motors were trading 1.96% lower at Rs 162.5. Tata Motors' auto sales in the domestic & international market, in January 2020 stood at 47,862 vehicles as against 58,185 units during January 2019, down 17.74% year-on-year (YoY). Total auto sales, however, registered a 2.04% rise from 46,903 units in December 2019. Total domestic sales declined 18% to 45,242 units in January 2020 as compared to 54,915 units in January 2019. Passenger vehicles segment saw sales decline by 22% to 13,894 units while the commercial vehicles sales witnessed 16% fall to 33,860 units in January 2020 over January 2019.

Lumax Industries fell 4.09%. Lumax Industries reported 61.14% fall in consolidated net profit to Rs 18.90 crore on 17.79% fall in total income to Rs 387.38 crore in Q3 December 2019 over Q3 December 2018. Lumax Industries will continue to invest in infrastructure, technology, product development, processes and human capital.

SML Isuzu rose 1.36%. The auto maker reported 11.53% rise in vehicle sales to 1,112 units in January 2020 from 997 units in January 2019. Total sales (cumulative 10 months till January 2020) fell 12% to 9,127 units as against 10,373 units in corresponding period previous year.

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