Nifty above 16,700 mark; VIX drops below 20 mark

The benchmark indices continued to trade with major gains in early afternoon trade. The Nifty was trading above 16,700 mark. Shares of IT, oil & gas and financial services advanced while auto, PSU banks and realty stocks corrected.

At 12:24 IST, the barometer index, S&P BSE Sensex was up 458.97 points or 0.82% to 56,277.08. The Nifty 50 index rose 103.10 points or 0.62% to 16,731.10.

In the broader market, the S&P BSE Mid-Cap index fell 0.29% while the S&P BSE Small-Cap index added 0.05%.

The market breadth was positive. On the BSE, 1,783 shares rose while 1,380 shares fell. A total of 144 shares were unchanged.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, slumped 5.68% to 19.1650. The Nifty 30 June 2022 futures were trading at 16,731.55 at a premium of 0.45 points as compared with the spot at 16,731.10.

The Nifty option chain for the 30 June 2022 expiry showed maximum Call OI of 49.3 lakh contracts at the 16,800 strike price. Maximum Put OI of 46.5 lakh contracts was seen at 16,500 strike price.

Buzzing Index:

The Nifty Oil & Gas index rose 1.05% to 8,059.25. The index has risen 3.35% in two consecutive sessions.

Among the components of the Nifty Oil & Gas index, Reliance Industries (up 3.16%), Castrol India (up 2.06%), Aegis Logistics (up 2.05%), Gujarat State Petronet (up 0.96%) and Petronet LNG (up 0.75%) were the top gainers.

Stocks in Spotlight:

Force Motors gained 3.31% to Rs 1,083.65 after the company's domestic sales jumped 31% to 1,709 units in May 2022 from 1,306 units sold in May 2021. As compared with April 2022, the domestic sales were higher by 29.4% last month. Export sales aggregated to 317 units in May 2022, jumping 105% on a year on year (YoY) basis and surging by 272% on a month on month (MoM) basis.

Ultratech Cement fell 4.38% to Rs 5,744. The cement manufacturer on Thursday said that its board has approved capex of Rs 12,886 crore towards increasing capacity by 22.6 MTPA, with a mix of brown field and green field expansion. This would be achieved by setting-up integrated and grinding units as well as bulk terminals. The additional capacity will be created across the country. The capex would be funded via a mix of debt and internal accruals. Cement firms are already under pressure due to elevated coal prices. The inability to pass-on cost fully to customers remains the primary concern.

A foreign brokerage reportedly said that the lack of strength in deciding pricing trend could hurt smaller cement manufacturers. It also reportedly observed a growing possibility of mergers and acquisitions in the space, especially after the Holcim deal by Adani Group, and UltraTech's expansion - both through brownfield and greenfield. The latest capex ensures Birla Group remains the biggest producer of cement in India, the report said.

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