Key benchmark indices hit day's low in early afternoon trade. The Nifty slipped below 12,000 mark and received support at 11,970 level. Investors were cautious ahead of the Reserve Bank of India's (RBI) monetary policy committee (MPC) meet between 3rd and 5th December 2019 to review the interest rates. Weak economic data also impacted sentiment.
At 12:26 IST, the barometer index, the S&P BSE Sensex, was down 184.61 points or 0.45% at 40,617.56. The Nifty 50 index was down 66.8 points or 0.55% at 11,981.40.
Selling was more prominent in broader market. The S&P BSE Mid-Cap index was down 0.87% while the S&P BSE Small-Cap index was down 0.72%.
The market breadth was weak. On the BSE, 706 shares rose and 1404 shares fell. A total of 171 shares were unchanged. In Nifty 50 index, 10 stocks advanced while 40 stocks declined.
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, jumped 12% to 15.9075. A rise in volatility indicates instability in benchmark index. The Nifty December 2019 futures were trading at 12,020, a premium of 43 points compared with the spot at 11,977.
On the options front, the Nifty option chain for 26 December 2019 expiry showed maximum call open interest (OI) of 19.08 lakh contracts at the 12,500 strike price. Call writing was witnessed at 12,100 strike price, which added 2.69 lakh contracts.
Maximum put OI of 32.93 lakh contracts was seen at 12,000 strike price. Put writing was seen at the 11,800 strike price, which added 3.06 lakh contracts.
The option chain indicates that Nifty will stay between 12,000 and 12,500 till December expiry, 26 December 2019.
The Nifty Auto index was down 0.4% at 7,980.65 after auto companies announced weak sales numbers in November. The auto index has lost 2.71% in four trading sessions from its previous closing high of 8202.85 on 27 November 2019.
Ashok Leyland (down 2.58%), SML Isuzu (down 1.57%), Tata Motors (down 1.55%), TVS Motors Company (down 1.14%), Eicher Motors (down 1.14%) and Mahindra and Mahindra (down 0.94%) were top losers in auto segment.
Stocks in Spotlight:
JSW Steel was trading 3.6% lower at Rs 285.75. JSW Steel announced that the company during the months of October and November supplied more than 30,000 metric tonnes high quality JSW Neosteel TMT Rebars towards construction of Metro projects in various Indian cities. This takes the company's overall supplies of JSW Neosteel TMT Rebards for metro construction projects to more than 85,000 metric tonnes so far in this fiscal.
Cadila Healthcare was trading 0.27% higher at Rs 258.85. Cadila Healthcare announced that Zydus Cadila has received the tentative approval from the USFDA to market Lorcaserin Hydrochloride Tablets. The drug is used in the treatment of obesity.
Gati was up 2.58%. Gati said that the meeting of the board of directors of the company is scheduled on 5 December 2019 to consider and approve fund raising by way of preferential issue and other related matters.
Rating agency Crisil on Monday sharply cut its growth forecast for the current financial year to 5.1% from an earlier estimate of 6.3%. Key short-term indicators like industrial production, merchandise exports, bank credit offtake, tax mop-ups, freight movement, and electricity production, all point to a weakening growth momentum, Crisil said in a research report.
India's (GDP) grew by 4.5% in Q2 September 2019, the lowest since Q4 March 2013. Gross value added (GVA), which is GDP minus taxes, grew 4.3% in Q2 September 2019, compared to 4.9% in Q1 June 2019 and 6.9% in Q2 September 2018. The farm sector grew 2.1% while the manufacturing sector de-grew by 1% in July-September 2019.
The Eight Core Industries, carrying 40.27% weight in the Index of Industrial Production (IIP), recorded 5.8% decline in the output for October 2019 over October 2018. Its cumulative output rose mere 0.2% in April-October 2019-20.
IHS Markit announced Purchasing Managers' Index (PMI) numbers for India. PMI is an economic indicator derived from monthly surveys of private sector companies. The headline seasonally adjusted IHS Markit India Manufacturing PMI rose to 51.2 in November from 50.6 in October, when it had fallen to a two-year low. The latest reading was below the survey average (53.8) and indicated only a slight improvement in the health of the sector. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.
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