Weak market breadth; insurance stocks in demand

Key equity indices further extended losses and hit fresh intraday low in early afternoon trade. Market sentiment remained subdued amid negative global cues. Rising crude oil prices also spooked investors. The Nifty continued to trade below 11,900 level.

At 12:30 IST, the barometer index, the S&P BSE Sensex, was down 162.22 points or 0.4% at 40,325.21. The Nifty 50 index was down 45.4 points or 0.38% at 11,892.1.

The S&P BSE Mid-Cap index was down 0.61% while the S&P BSE Small-Cap index was down 0.39%.

The market breadth favored the sellers. On the BSE, 768 shares rose and 1402 shares fell. A total of 131 shares were unchanged. In Nifty 50 index, 19 stocks advanced while 31 stocks declined.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, declined 0.82% to 14.4775. The Nifty December 2019 futures were trading at 11,929.40, a premium of 36.65 points compared with the spot at 11,892.75.

On the options front, the Nifty option chain for 26 December 2019 expiry showed maximum call open interest (OI) of 25.91 lakh contracts at the 12,000 strike price. Maximum put OI of 32.93 lakh contracts was seen at 12,000 strike price.

Buzzing Sector:

Shares of six insurance company rose 0.30% to 8.32% after media reported that the government may raise the overseas investment limit in insurance firms from 49% to 74% in the February budget.

The New India Assurance Company (up 8.32%), General Insurance Corporation of India (up 2.27%), SBI Life Insurance Company (up 1.61%) ICICI Prudential Life Insurance Company (up 1.01%), HDFC Life Insurance Company (up 0.89%) and ICICI Lombard General Insurance Company (up 0.30%) were top gainers in insurance segment.

According to media reports, the Insurance Regulatory and Development Authority of India (IRDAI) has sought the views of various stakeholders on the matter in a December 2 letter at the direction of the government. The letter to insurance companies and others has called for suggestions on raising the foreign direct investment (FDI) limit, the reports said. The government raised FDI in insurance under the automatic route to 49% from 26% in 2015. The government increased the limit on FDI in insurance intermediaries to 100% on September 2.

Stocks in Spotlight:

Shares of HDFC were trading 0.22% lower at Rs 2305.55. HDFC said it is proposing to acquire 1,14,70,000 shares representing 9.12% of the equity share capital of its subsidiary HDFC Credila Financial Services from its other promoters for amount not exceeding Rs 395 crore. Post acquisition, HDFC Credila Financial Services will become wholly owned subsidiary of HDFC.

Bank of Baroda was up 0.1%. The bank reported that the Investment Committee has approved the participation of the bank in the proposed IPO of equity shares of UTI Asset Management Company by way of an offer for sale of up to 1,04,59,949 equity shares held by it.

PC Jeweller tumbled 4.44% after CRISIL downgraded its long term and short terms ratings to the bank loan facilities of the company to CRISIL D. The downgrade in the rating factors in the instances of devolvement of letter of credits (LC) and overutilization in working capital limits for more than 30 days.

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