Sensex, Nifty hover near day's low; VIX slips below 20 mark

The equity barometers once again slipped into the negative terrain and were hovering near the day’s low in early afternoon trade. Metal and pharma stocks witnessed selling. Investors remained cautious ahead of US Federal Reserve’s two-day policy meeting which will conclude later in the day.

At 12:20 IST, the barometer index, the S&P BSE Sensex, declined 119.13 points or 0.24% at 50,244.83. The Nifty 50 index lost 55.15 points or 0.37% at 14,855.30.

In the broader market, the S&P BSE Mid-Cap index fell 1.13% while the S&P BSE Small-Cap index slipped 0.78%.

The market breadth was weak. On the BSE, 997 shares rose and 1,723 shares fell. A total of 167 shares were unchanged.

Derivatives:

The NSE’s India VIX, a gauge of market’s expectation of volatility over the near term, fell 1.52% to 19.8825. The Nifty 25 March 2021 futures were trading at 14,900, at a premium of 44.70 points as compared with the spot at 14,855.30.

The Nifty option chain for 25 March 2021 expiry showed maximum Call OI of 25.3 lakh contracts at the 16,000 strike price. Maximum Put OI of 28.2 lakh contracts was seen at 14,500 strike price.

Economy:

The Union Cabinet on Tuesday cleared the proposal to set up a Development Finance Institution (DFI). Finance Minister Nirmala Sitharaman had announced in the Union Budget that the government will set up DFI to fund long-term infrastructure projects in the country.

The government will initially infuse Rs 20,000 crore in the DFI, Sitharaman said while briefing the media on Cabinet decisions, adding that the government plans to raise up to Rs 3 lakh crore in the next five years. The government will provide tax exemptions and also amend the Indian Stamp Act to attract pension funds, sovereign funds to invest in DFI.

DFI will have a professional board. At least 50% of the members will be non-official directors. Persons of eminence are envisaged to be on the board. We are making sure that Board will be such as to meet the requirements of 21st century, Sitharaman said.

The DFI will start with 100% ownership of Government of India, and gradually government’s ownership will be brought down to 26%.

Coronavirus Update:

Total COVID-19 confirmed cases worldwide stood at 12,06,95,785 with 26,70,453 deaths. India reported 2,34,406 active cases of COVID-19 infection and 1,59,044 deaths while 1,10,45,284 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Buzzing Index:

The Nifty Pharma index fell 1.34% to 11,851.55. The index declined 3.74% in four days.

Sun Pharmaceutical Industries (down 2.33%), Lupin (down 2.15%), Cipla (down 1.70%), Cadila Healthcare (down 1.67%) and Torrent Pharmaceuticals (down 1.66%) were the top losers in Pharma segment.

Stocks in Spotlight:

GMM Pfaudler gained 1.77% after the company announced the acquisition of assets of HDO Technologies for a consideration of Rs 58.46 crore. The company said that it had participated in the e-auction process for sale of assets (factory land, building, plant and machinery, office equipment, computers, furniture and fixtures, vehicles and capital work in progress) owned by HDO Technologies (in liquidation). It was declared as the successful bidder by the liquidator.

Bharat Forge slipped 0.74%. The company intends to consolidate its EV initiatives under one single wholly-owned subsidiary. The auto components firm on Tuesday said it intends to undertake electric vehicle (EV) business through a special purpose vehicle (SPV), which would be a wholly-owned subsidiary of the company. As an initial step, the company has decided to acquire newly formed group firm Kalyani Powertrain (KPPL), Bharat Forge said in a filing.

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