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NSE Intra-day chart (03 August 2020)
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Market Commentary 04 August 2020
Benchmarks likely to open in green amid positive global cues


Extending their losing streak for fourth straight session, Indian equity benchmarks ended Monday's trade on a pessimistic note with losses of over one and half a percent each, on the back of sustained selling by investors owing to muted earnings by some corporate. A weak trend in other Asian markets along with concerns over rising Covid-19 cases also added pressure on the markets. After gap-down opening, the domestic bourses never looked in recovery mood and continued moving northward to end near intraday lows, breaching their crucial support levels of 36,950 (Sensex) and 10,900 (Nifty). Sentiments remained subdued with union Finance Minister Nirmala Sitharaman's statement that the coronavirus pandemic has definitely hit the supply chains which are continuing to disrupt the economic revival. Some weakness also crept in after the Commerce and Industry Ministry's data showed that contracting for the fourth consecutive month, the output of eight core infrastructure industries shrank by 15% in June due to fall in the production of coal, crude oil, natural gas, steel, cement and electricity. Markets remained under pressure in late afternoon session, as a monthly survey showed India's manufacturing sector activity contracted at a slightly faster pace in July as demand conditions remained subdued amid prolonged closures, following which firms reduced both staff numbers as well as purchasing activity. The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) stood at 46 in July, down from 47.2 in June. Adding anxiety among traders, Finance Ministry said that the GST collections in July fell to Rs 87,422 crore from Rs 90,917 crore in June. However, July collections are higher than Rs 62,009 crore in May and Rs 32,294 crore in April.  Traders also took a note of 15th Finance Commission Chairman N K Singh's statement that India needs to grow much faster over the next 10 years with the use of technology and reforms in order to become an important global player. To achieve the potential growth rate of 7-8 per cent, he said India has to improve factor productivity and reduce incremental capital output ratio. Finally, the BSE Sensex lost 667.29 points or 1.77% to 36,939.60, while the CNX Nifty was down by 181.85 points or 1.64% to 10891.60.


The US markets ended higher on Monday with Nasdaq jumping to a new record closing high, as Technology stocks saw continued strength on the day after moving sharply higher last Friday on largely upbeat earnings news. Shares of Microsoft soared by 5.6 percent to a new record closing high after the software giant confirmed it is in talks to acquire Chinese-owned video-sharing app TikTok. The statement from Microsoft came just days after President Donald Trump revealed plans to ban TikTok in the US due to national security concerns. Adding to the positive sentiment on markets, the Institute for Supply Management (ISM) released a report showing a bigger than expected acceleration in the pace of growth in US manufacturing activity in the month of July. The ISM said its Purchasing Managers Index rose to 54.2 in July from 52.6 in June, with a reading above 50 indicating growth in manufacturing activity. Street had expected the index to inch up to 53.6. Chair of the ISM Manufacturing Business Survey Committee Timothy R. Fiore said in July, manufacturing continued its recovery after the disruption caused by the coronavirus (COVID-19) pandemic. He added panel sentiment was generally optimistic (two positive comments for every one cautious comment), continuing a trend from June. With the bigger than expected increase, the Purchasing Managers Index reached its highest level of expansion since March of 2019. The advance by the headline index came as the new orders index jumped to 61.5 in July from 56.4 in June and the production index surged up to 62.1 from 57.3. However, coronavirus infections in the US reached a record in July, with more than 1.9 million new cases. The US has nearly 4.7 million confirmed COVID-19 cases and about 155,000 deaths, while the global tally for infections stands at more than 18 million and almost 690,000 deaths.


Crude oil futures settled higher on Monday, extending their previous session's gains, as encouraging economic data helped ease concerns about energy demand. An Institute for Supply Management report showed activity in US manufacturing sector accelerated at a bigger than expected pace in July. The report said its Purchasing Managers Index rose to 54.2 in July from 52.6 in June, with a reading above 50 indicating growth in manufacturing activity. Street had expected the index to inch up to 53.6. However, upside remained capped as OPEC and its allies relax curbs on output and the number of COVID-19 cases continue to rise. New COVID-19 cases rose to 4.67 million in the US, with the death toll rising to 154,860. New daily cases have increased in the past week in 13 states, the data show, and 13 states have seen more than a double-digit percentage of tests turn out positive for COVID-19. Crude oil futures for September rose 74 cents or 1.8 percent to settle at $41.01 a barrel on the New York Mercantile Exchange. October Brent crude gained 63 cents or 1.5 percent to settle at $44.15 a barrel on London's Intercontinental Exchange.


Indian rupee concluded substantially weaker against dollar on account of continued dollar demand from importers and banks. Sentiments remained fragile as Indian manufacturing activity declined in the month of July, as demand conditions remained subdued with some businesses still closed amid lockdown extensions. As per the survey report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance fell to 46 in July as against 47.2 in June. Besides, losses in the local equity markets combined with disappointing quarterly earnings by some blue- chip companies also dampened sentiments. On the global front, dollar rallied against a basket of rivals on Monday as a squeezing out of crowded short positions combined with safe-haven demand gave the currency some respite after its worst monthly performance in a decade. Finally, the rupee ended at 75.01, 20 paise weaker from its previous close of 74.81 on Friday.


The FIIs as per Monday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 4818.58 crore against gross selling of Rs 5733.95 crore, while in the debt segment, the gross purchase was of Rs 804.69 crore with gross sales of Rs 185.06 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.04 crore against gross selling of Rs 10.22 crore.


The US markets ended higher on Monday as a rebound in multi-billion dollar deals, including Microsoft's pursuit of TikTok's US operations, lifted sentiment as efforts to hammer out a coronavirus relief bill resumed. Asian markets are trading mostly in green on Tuesday after strong manufacturing data and gains in tech stocks boosted global equities and the US dollar overnight. Indian markets ended sharply lower on Monday to extend recent losses, with mixed global cues, foreign fund outflows and rising Covid-19 cases in the country weighing on sentiment. Today, the markets likely to open in green following overnight gains on Wall Street and positive leads from Asian peers. Investors will be eyeing the Reserve Bank of India's (RBI) three-day monetary policy meeting that begins today. Some support will come with CARE Ratings' report that banks have sanctioned around 44 percent of the targeted amount of liquidity support to micro, small and medium enterprises (MSMEs) under the government's Emergency Credit Line Guarantee Scheme (ECLGS). Though, rising coronavirus cases may impact sentiments. India has recorded over 50,000 cases in 24 hours for a 6th straight day, taking its tally to 1,855,331. After conducting over 20 million tests, India's positivity rate is now at over 8%. India's death toll stands at 38,969. Aviation stocks will be in focus as rating agency Icra said airlines operated at a much lower capacity at around 27 per cent in July 2020 compared to July 2019 level but there was a marginal increase over the 25 per cent capacity achieved in June 2020. Technology companies stocks will be in limelight as US President Donald Trump on Monday signed a new executive order on aligning federal contracting and hiring practices with the interest of American workers. There will be some reaction in telecom stocks with a report that Trai has granted additional time to Bharti Airtel and Vodafone Idea to submit detailed responses on fresh set of questions on their premium plans, where queries range from what happens when a non-priority customer is surrounded by priority users during congestion, to limit of throughput configured for the two sets of subscribers. There will be lots of earnings reaction based on the performance of the companies.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Tata Motors





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Indian Oil Corporation





Sun Pharmaceutical Industries






  • Coal India has reported fall in its production by 3% to 37.36 MT in July compared to 38.51 MT of coal in July last year. 
  • Maruti Suzuki India has reported total sales of 108,064 units in July 2020, as compared 109,264 units in July 2019, registering fall of 1.1%. 
  • Bajaj Auto has reported 33 per cent decline in total sales to 255,832 units in July as against 381,530 in the same month last year. 
  • TVS Motor Company has registered a 10 percent decline in total sales at 2,52,744 units in July 2020 as against 279,465 units in the month of July 2019.
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