Market turns rangebound; VIX jumps 7%; metal shares advance

The key equity indices traded in a narrow range with minor gains in early afternoon trade. The Nifty traded above 21,900 level. Metal shares extended gains for the second consecutive trading session.

At 12:30 IST, the barometer index, the S&P BSE Sensex, was up 91.40 points or 0.13% to 72,177.03. The Nifty 50 index added 57.05 points or 0.26% to 21,910.85.

In the broader market, the S&P BSE Mid-Cap index rose 0.84% and the S&P BSE Small-Cap index added 0.56%.

The market breadth was positive. On the BSE, 2,092 shares rose and 1,773 shares fell. A total of 158 shares were unchanged.

Economy:

The seasonally adjusted HSBC India Services PMI Business Activity Index came at 61.8 in January, up from 59 in December, comfortably above the neutral level of 50 and pointed to the sharpest rate of expansion in six months. Moreover, the current sequence of uninterrupted increases was stretched to two-and-a-half years. According to survey participants, growth was spurred by demand buoyancy, productivity gains and rising intakes of new work.

The HSBC India Composite PMI Output Index rose to 61.2 in December from 58.5, indicating the sharpest upturn since mid-2023. January data highlighted a further acceleration in growth of Indian private sector output, amid quicker increases at both goods producers and service providers.

Meanwhile, India�s forex reserves increased $591 million to $616.733 billion for the week ended January 26, according to the latest RBI data. In the previous reporting week, the overall reserves had dropped $2.795 billion to $616.143 billion.

Gold reserves increased $269 million to $47.481 billion during the week, the RBI said. The special drawing rights (SDRs) were up $27 million to $18.248 billion, the apex bank said.

Derivatives:

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, jumped 7.02% to 15.73. The Nifty 29 February 2024 futures were trading at 21,965, at a premium of 54.15 points as compared with the spot at 21,910.85.

The Nifty option chain for the 29 February 2024 expiry showed maximum Call OI of 42 lakh contracts at the 23,000 strike price. Maximum Put OI of 34.7 lakh contracts were seen at 21,000 strike price.

Buzzing Index:

The Nifty Metal index advanced 1.40% to 8,191.65. The index rallied 3.81% in two trading sessions.

Steel Authority of India (up 5.85%), NMDC (up 4.5%), National Aluminium Company (up 3.76%), Tata Steel (up 2.56%), Welspun Corp (up 2.56%), Vedanta (up 1.69%), Adani Enterprises (up 1.41%), Jindal Stainless (up 0.8%), Hindalco Industries (up 0.4%) and Jindal Steel & Power (up 0.13%) advanced.

On the other hand, APL Apollo Tubes (down 1.65%), Ratnamani Metals & Tubes (down 0.81%) and Hindustan Zinc (down 0.8%) declined.

Stocks in Spotlight:

Titagarh Rail Systems (TRSL) shed 0.44%. The company�s standalone net profit surged 91.25% to Rs 75.03 crore in Q3 FY24 as against to Rs 39.23 crore posted in Q3 FY23.Revenue from operations jumped 24.6% to Rs 954.68 crore in Q3 FY24 from Rs 766.40 crore recorded in the corresponding quarter previous year.

Larsen & Toubro (L&T) fell 0.52%. The EPC major announced that its hydrocarbon business, L&T Energy Hydrocarbon (LTEH) has secured �large� onshore project from Indian Oil Adani Ventures. As per Larsen & Toubro`s (L&T) classification, the value of the �large` contract lies between Rs 2,500 crore and Rs 5,000 crore.

Aurobindo Pharma declined 1.09% after the US drug regulator issued nine observations post inspection at Telangana manufacturing facility of Eugia Pharma Specialities, a wholly owned subsidiary of the company. Meamwhile, Eugia US Manufacturing LLC, USA, a wholly owned step-down subsidiary of the company has entered into an asset purchase agreement with Empower Clinic Services New Jersey, LLC to dispose of its business assets as a going concern with related assets and liabilities and employees.

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