Shares trade firm; India VIX slumps about 8%

The Sensex and the Nifty traded near the day's high in early afternoon trade, tracking a China-led recovery in broader Asian markets. Steep drop in crude oil prices also supported buying.

At 12:22 IST, the S&P BSE Sensex, advanced 785.6 points or 1.97% at 40,657.91. The Nifty 50 index surged 235.75 points or 2.01% at 11,943.65

The broader market trailed the benchmark index. The S&P BSE Mid-Cap index was up 1.42% while the S&P BSE Small-Cap index was up 1.33%.

There were more buyers than sellers. On the BSE, 1513 shares rose and 697 shares fell. A total of 160 shares were unchanged. In Nifty 50 index, 46 stocks advanced while 4 stocks declined.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, slumped 7.68% to 14.57. The Nifty February 2020 futures were trading at 11,924.85, a discount of 12.05 points compared with the spot at 11,936.90.

On the options front, the Nifty option chain for 27 February 2020 expiry showed maximum call open interest (OI) of 19.48 lakh contracts at the 12,500 strike price. Maximum call writing was witnessed at 11,900 strike price, which added 1.93 lakh contracts. Massive call unwinding was seen at 12,000 strike price which shed 1.93 lakh contracts.

Maximum put OI of 24.48 lakh contracts was seen at 12,000 strike price. Massive put writing was observed at 11,900 strike which added 4.08 lakh contracts. Put unwinidng was seen at 11,000 strike price which shed 1.41 lakh contracts.

Stocks in Spotlight:

J.K. Cement advanced 1.86%. The cement maker said it has commissioned a 1-mt-per annum grey cement grinding capacity in Chittorgarh district of Rajasthan and a 1.5 mt per annum utility in Aligarh, Uttar Pradesh. Both units have already started commercial dispatches. Work at split-grinding unit in Balasinor, Gujarat is in advanced stage of completion.

GMR Infrastructure gained 2.09%. GMR Hyderabad International Airport (GHIAL), a subsidiary of GMR Infrastructure, has signed a concession agreement to commission, operationalise and maintain the civilian enclave at Bidar airport in north Karnataka. The agreement is under India's regional connectivity scheme UDAN, or Ude Desh Ka Aam Nagrik.

TCS was up 0.29%. The IT major said it has won a $1.5 billion deal across a ten-year period from US pharma retailer Walgreens Boots Alliance (WBA) to transform its technology operations.

Global Markets:

Asian markets were trading higher on Tuesday as investors gauged efforts to contain the coronavirus and awaited potential responses from policy makers.

The US Dow index futures was up 200 points on Tuesday, signaling a continuation of the enormous relief rally that began at the start of the week.

The US stock market bounced back on Monday, clawing back some losses from Friday's brutal selloff, even as investors kept an eye on battered Chinese equity exchanges.

Also helping drive gains in US stocks were data on the manufacturing sector from the Institute for Supply Management, whose purchasing manager's index rose to a six-month high of 50.9% in January. A reading above 50% indicates expansion, while below 50% indicates contraction.

Crude Oil fell to its lowest level in more than a year on concerns of the coronavirus outbreak and its potential impact on demand. China is world's largest crude importer. The media reported that OPEC members are planning an emergency meeting for discussing large production cut. In the commodities market, Brent crude for April 2020 settlement was up 30 cents at $54.75 a barrel. The contract tumbled 3.83% to settle at $54.45 a barrel in the previous trading session.

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