Market Commentary - Mid-Session
Market at day's low; financial services shares decline As on : 03-Oct-24  12:36

The domestic equity benchmarks traded with significant losses in early-afternoon trade amid mixed cues from global markets and fears of full fledged war between Iran and Israel. The fall was also triggered by SEBI's new F&O rules. The Nifty traded below the 25,400 level. Financial services shares extended losses for the fourth consecutive trading session. Trading was volatile due to weekly F&O series expiry today.

At 12:30 IST, the barometer index, the S&P BSE Sensex tumbled 1,363.31 points or 1.61% to 82,913.07. The Nifty 50 index dropped 418.60 points or 1.62% to 25,378.30.

In the broader market, the S&P BSE Mid-Cap index slipped 1.71% and the S&P BSE Small-Cap index declined 1.42%.

The market breadth was weak. On the BSE, 1,100 shares rose and 2,764 shares fell. A total of 108 shares were unchanged.

SEBI's new F&O rules:

The Securities and Exchange Board of India's (SEBI) introduced a six-step plan to curtail retail participation in speculative index derivatives. This could result in a significant decline in trading volumes. New regulations require traders to maintain higher margins, potentially hindering their ability to take on larger leveraged positions.

Moreover, the reduction of weekly options expiries to one per exchange could lead to decreased revenues for exchanges and brokers. This change means that each exchange will only offer weekly contracts for one benchmark index instead of the current two to four. These measures are designed to reduce excessive speculation in the futures and options (F&O) segment, where retail investors often find themselves on the losing end of trades.

Derivatives:

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, soared 11.15% to 13.33. The Nifty 31 October 2024 futures were trading at 25,569.50, at a premium of 191.20 points as compared with the spot at 25,378.30.

The Nifty option chain for the 31 October 2024 expiry showed maximum Call OI of 63.2 lakh contracts at the 27,000 strike price. Maximum Put OI of 37.4 lakh contracts were seen at 25,000 strike price.

Buzzing Index:

The Nifty Financial Services index slipped 1.70% to 24,062.30. The index fell 4.34% in the four consecutive trading sessions.

Cholamandalam Investment & Finance Company (down 4.08%), Shriram Finance (down 3.84%), Power Finance Corporation (down 3.57%), REC (down 2.69%), LIC Housing Finance (down 2.67%), Axis Bank (down 2.65%), Bajaj Finserv (down 2.59%), Bajaj Finance (down 2.39%), Kotak Mahindra Bank (down 2.35%) and IDFC (down 2.27%) declined.

Stocks in Spotlight :

Hero MotoCorp declined 1.06%. The two-wheeler major's total motorcycle and scooter sales jumped 18.74% to 637,050 units in September 2024 as compared with sales of 536,499 units recorded in September 2023.

J.Kumar Infraprojects added 0.36%. The company has received Letter of Acceptance (LoA) from Mumbai Metropolitan Region Development Authority (MMRDA) worth Rs 1,847.72 crore.

Transformers and Rectifiers (India) rallied 3.49% after the company announced that it has secured orders worth Rs 565 crore from Power Grid Corporation of India for supply of transformer and reactors.

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