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Markets sink; metal stocks buck weak trend as iron-ore prices in global markets surges to almost 10-year highs

Karan DSIJ
·2-min read

It’s turning out to be a ‘Black Monday’ for the Indian markets as the fear of the second wave of Coronavirus triggered selling in the markets.

Nifty and Sensex have witnessed a sharp fall of over 1 per cent with Sensex trading close to the 50,250 mark while Nifty being just above the 14,800 mark. The broader indices were trading in red too; however, they have relatively outperformed the frontline gauges with Nifty Mid-cap and Small-cap witnessing a cut of nearly half a per cent.

India VIX index, the so-called fear index, jumped by a whopping 8 per cent and it has now crossed the 24-mark.

On the sectoral front, barring Nifty Metal, which has gained 2.46 per cent, all other indices were trading in red with Nifty Media, Nifty PSU Bank, and Nifty Auto being the top losers.

The metal sector was seen bucking the negative trend on Monday after iron-ore prices in the global market surged to almost 10-year highs. It’s believed that the key catalyst for the surge in price is due to China’s return to the global market after Lunar New Year.

Among individual stocks, Hindustan Copper has emerged as the poster boy as it gained more than 15 per cent and logged a fresh 52-week high while the stock witnessed more than a two-fold rise of the 10-day average.

Ratnamani Metals and Hindalco Industries also scaled to their fresh all-time highs on the back of the robust volume. Apart from metal stocks, one more stock that witnessed a mammoth surge in volumes and price is Jagran Prakashan. The stock was up by nearly 10 per cent on the back of the board of directors meeting, which is scheduled for March 02, 2021, to consider the buyback proposal.

On the options’ front, the maximum open interest concentration on the call option side is seen at 15,000 levels with more than 23 lakh open interest addition witnessed today itself. Further, on the put side, unwinding was seen at the strike price of 15,000. Hence, the level of 15,000 is going to be a big hurdle for Nifty in the near term. While on the downside, the region of 14,740-14,800 could offer some support as 14,800 put strike price has seen the open interest addition of more than 8 lakh.

Put-Call Ratio (PCR) of Nifty dropped to 0.76 and this indicates more Call Writing than Puts.