Nifty below 24,450; financial services share slides; VIX jumps 5.71%

The headline equity benchmarks traded with minor losses in early afternoon trade. The Nifty traded below the 24,450 mark. Finanicial services shares declined after advancing in past two consecutive trading sessions.

At 12:30 IST, the barometer index, the S&P BSE Sensex, was down 110.23 points or 0.14% to 80,255.18. The Nifty 50 index lost 26.85 points or 0.11% to 24,440.00.

The broader market outperformed the benchmark indices. The S&P BSE Mid-Cap index rose 0.69% and the S&P BSE Small-Cap index jumped 1.67%.

The market breadth was strong. On the BSE, 2,906 shares rose and 835 shares fell. A total of 122 shares were unchanged.

Economy:

The Indian diaspora's confidence in the Indian economy has soared, as evidenced by the significant increase in Non-Resident Indian (NRI) deposits. According to the Reserve Bank of India's (RBI) latest monthly bulletin, inflows into NRI deposit schemes surged to $7.82 billion in the period of April-August 2024, more than double the $3.74 billion recorded in the same period last year.

Both dollar-denominated (FCNR(B)) and rupee-denominated (NRE(RA)) deposits witnessed substantial growth.

Among the various NRI deposit schemes, Foreign Currency Non-Resident (FCNR) deposits witnessed the highest inflow, attracting $3.47 billion during the period, compared to $1.55 billion in the corresponding period a year ago. These deposits, denominated in foreign currencies, offer security against currency fluctuations and provide attractive returns.

Non-Resident External (NRE) deposits, which are rupee-denominated accounts, also saw a significant increase, with inflows of $2.51 billion during this period, compared to an inflow of $868 million in the corresponding period a year ago.

Non-Resident Ordinary (NRO) deposits, which are also rupee-denominated, also saw inflows worth $1.84 billion from April泡ugust, 2024, compared to $1.32 billion during the same period a year ago.

This surge can be attributed to factors such as attractive returns in Indian markets, strong economic fundamentals, and a more stable domestic monetary policy environment compared to many global economies.

With total outstanding NRI deposits reaching $158.94 billion as of August 2024, the Indian diaspora's continued trust in the country's economic prospects is evident.

Derivatives:

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, jumped 5.71% to 15.35. The Nifty 31 October 2024 futures were trading at 24,463.95, at a premium of 23.95 points as compared with the spot at Rs 24,440.

The Nifty option chain for the 31 October 2024 expiry showed maximum Call OI of 116 lakh contracts at the 25,000 strike price. Maximum Put OI of 89.3 lakh contracts were seen at 24,400 strike price.

Buzzing Index:

The Nifty Financial Services index slipped 0.95% to 24,125.40. The index gained 2.55% in past two consecutive trading sessions.

Multi Commodity Exchange of India (down 4.05%), REC (down 1.97%), ICICI Bank (down 1.78%), SBI Life Insurance Company (down 1.74%), Shriram Finance (down 1.73%), Cholamandalam Investment & Finance Company (down 1.7%), Axis Bank (down 1.42%), Power Finance Corporation (down 1.13%), HDFC Life Insurance Company (down 0.95%) and Bajaj Finance (down 0.92%) declined.

On the other hand, ICICI Lombard General Insurance Company (up 2.05%), SBI Cards & Payment Services (up 1.01%) and LIC Housing Finance (up 0.64%) edged higher.

Stocks in Spotlight:

Honeywell Automation India slumped 7.75% after the company reported 5.57% decline in net profit to Rs 115.10 crore on 7.27% decrease in revenue from operations to Rs 1,023.9 crore in Q2 FY25 over Q2 FY24.

Voltas declined 1.88% after the company's consolidated net profit slipped 59.91% to Rs 133.99 crore on 46.78% decline in revenue from operations to Rs 2,619.11 crore in Q2 FY25 over Q1 FY25.