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Barometers off day's high; breadth turns negative

Capital Market 

Indices were off day's high in early afternoon as traders booked profits. The benchmarks, however, continued trading higher as RBI left key policy rates unchanged and said GDP growth may break out of contraction and turn positive by Q4.

At 12:27 IST, the barometer index, the S&P BSE Sensex, was up 227.32 points or 0.57% at 40,409.39. The Nifty 50 index was up 52.25 points or 0.44% at 11,886.85.

The broader market declined. The S&P BSE Mid-Cap index was down 0.12% while the S&P BSE Small-Cap fell 0.22%.

The market breadth turned negative. On the BSE, 1125 shares rose and 1291 shares fell. A total of 138 shares were unchanged.

COVID-19 Update:

India reported 8,93,592 active cases of COVID-19 infection and 106,490 deaths while 59,06,069 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India. Total COVID-19 confirmed cases worldwide stood at 36,444,284 with 1,060,929 deaths.

RBI Policy Outcome:

RBI's Monetary Policy Committee (MPC) decided to hold key policy rates at existing levels. Three new external members in the panel voted in today's decision. The repo rate, the interest rate at which it lends short-term funds to commercial lenders, was retained at 4%. Consequently, the reverse repo rate, at which the RBI borrows from lenders, remained unchanged at 3.35%. The central bank retained its "accommodative" stance on monetary policy to support the coronavirus-hit economy.

Reserve Bank of India (RBI) Governor Shaktikanta Das said that India's GDP growth will contract by 9.5% in fiscal 2021 due to disruptions caused by the Covid-19 pandemic that has hit economic activities. However, the GDP growth rate may break out of contraction and turn positive during January-March due to recovery seen across sectors, he added.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 1.27% to 20.64.

The Nifty October 2020 futures were trading at 11,917.30, a discount of 1.15 points with the spot at 11,918.45.

The Nifty option chain for 15 October 2020 expiry showed maximum call open interest (OI) of 28.35 lakh contracts at the 12,500 strike price. Maximum put OI of 24.68 lakh contracts was seen at 11,800 strike price.

The Nifty option chain for 29 October 2020 expiry showed maximum Call OI of 20.34 lakh contracts at the 12,500 strike price. Maximum Put OI of 35.19 lakh contracts was seen at 10,500 strike price.

Buzzing Index:

The Nifty Metal index gained 0.21% to 2,277.10, rising for the second trading session.

Jindal Steel & Power (up 2.08%), Hindustan Zinc (up 1.83%), NALCO (up 1.29%), Coal India (up 1.19%), Vedanta (up 1.06%) and Steel Authority of India Ltd (up 0.89%) advanced.

JSW Steel fell 0.36%. The steel major's crude steel production rose 30% to 3.85 million tonnes (MnT) in Q2 FY21 as against 2.96 MnT in Q1 FY21. The company said it achieved average capacity utilisation of 86% in Q2 FY21 in line with pre Covid-19 level of 85% in Q2 FY20. This is higher from capacity utilisation of 66% for Q1 FY21, which was impacted by the pandemic.

Sequentially, rolled products (flat) production jumped 38% to 2.84 MnT in Q2 FY21 as against 2.05 MnT in Q1 FY21. Rolled products (long) production jumped 69% to 0.77 MnT during the quarter compared with 0.45 MnT achieved in the previous quarter. On a year-on-year (Y-o-Y) basis, crude steel production was almost flat compared with 3.84 MnT in Q2 FY20. Rolled products (flat) production jumped 5% to 2.84 MnT in Q2 FY21 as against 2.71 MnT in Q2 FY20. Rolled products (long) production slipped 7% to 0.77 MnT during the quarter compared with 0.82 MnT in the corresponding quarter last year.

Tata Steel rose 0.15%. The company said it achieved the highest ever quarterly deliveries of 5.05 million tons in India. The company's production volume rose 2% to 4.59 million tonnes while the delivery volumes jumped 22.28% to 5.05 million tonnes in Q2 FY21 over Q2 FY20.

In India, in Q2 FY21, overall apparent steel consumption was down by 7.5% year-on-year (YoY) while crude steel production was down by 1.9% YoY. In this environment, Tata Steel India ramped up its steelmaking and downstream operations back to pre-COVID level, with all major sites operating at around full capacity utilization.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Fri, October 09 2020. 12:23 IST
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