The benchmark indices pared early gains and were trading near the flat line in early afternoon trade. At 12:22 IST, the barometer index, the S&P BSE Sensex, was up 27.58 points or 0.07% at 40,621.38. The Nifty 50 index added 15.50 points or 0.13% at 11,946.45.
Gains were capped as India's retail inflation in September rose above the RBI's comfort level, while industrial output continued to contract in August, official data showed on Monday. The RBI MPC has given the mandate to maintain annual inflation at 4% until 31 March 2021, with an upper tolerance of 6% and a lower tolerance of 2%.
In the broader market, the S&P BSE Mid-Cap index rose 0.22% while the S&P BSE Small-Cap index added 0.14%.
The market breadth was flat. On the BSE, 1158 shares rose and 1238 shares fell. A total of 148 shares were unchanged.
India reported 838,729 active cases of COVID-19 infection and 109,856 deaths while 6,227,295 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 37,745,942 with 1,079,963 deaths, according to data from Johns Hopkins University.
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, shed 0.24% to 21.075. The Nifty October 2020 futures were trading at 11,940.50, at a discount of 5.95 points compared with the spot at 11,946.45.
The Nifty option chain for 15 October 2020 expiry showed maximum call open interest (OI) of 38.67 lakh contracts at the 12,500 strike price. Maximum put OI of 30 lakh contracts was seen at 11,900 strike price.
The Nifty option chain for 29 October 2020 expiry showed maximum Call OI of 23.64 lakh contracts at the 12,500 strike price. Maximum Put OI of 34.85 lakh contracts was seen at 10,500 strike price.
Cement stocks surged after a foreign brokerage reportedly indicated an improving demand outlook. According to reports, the brokerage said that the improving demand may pave the way for an increase in cement prices which had corrected between 2-5% in the second quarter.
UltraTech Cements (up 4.31%), Ambuja Cements (up 3.92%), ACC (up 3.14%), Grasim Industries (up 2.45%) and Birla Corporation (up 1.74%) advanced.
The Nifty Bank index was down 0.31% at 23,639.55. The index has lost 0.9% in two sessions.
Among the private sector banks, City Union Bank (down 3.64%), ICICI Bank (down 1.88%), RBL Bank (down 1.63%), Bandhan Bank (down 0.90%) and HDFC Bank (down 0.38%) declined.
Among the public sector banks, Central Bank of India (down 3.77%), Bank of Maharashtra (down 1.80%), Indian Bank (down 1.94%), Union Bank of India (down 1%), Bank of India (down 0.97%), Punjab National Bank (down 0.77%), Bank Of Baroda (down 0.60%) and Jammu and Kashmir Bank (down 0.33%) edged lower.
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