Indian equity benchmarks erased
their intra-day gains to settle with negative bias on Tuesday, amid selling in
blue-chip counters such as Tata Steel, Bharti Airtel, Axis Bank and ONGC. After
making a cautious start, key indices gained traction and traded firmly higher
for most part of the day, as traders took support with report that the Reserve
Bank of India (RBI) announced a special round of simultaneous sale and purchase
of government securities (G-Secs) for Rs 10,000 crore each, on September 10,
2020. It has released details of the sale and purchase of securities, which
will be done using the multiple price auction method. Some optimism also came
with industry chamber Assocham's statement that the rate of decline in output
of core segments of the economy has been arrested considerably in July 2020. In
line with an evaluation by Assocham, cement, steel and coal, which suffered
heavy declines in the first quarter, recovered significantly in July 2020, even
though the annualised numbers reflect contraction. However, the benchmark
indices failed to hold initial gains and fell in the final minutes of trade to
end with minor cuts, as traders got anxious with Moody's Investors Service's
report that the continued rise in new infection rates across parts of Europe
and Asia highlights the risk of a second wave of infections which could lead to
renewed closures and a sustained pullback in consumption. Some cautiousness
also came after domestic rating agency India Ratings and Research revised the
country's FY21 GDP growth forecast to (-) 11.8 per cent from (-) 5.3 per cent
earlier. The agency, however, expects India's gross domestic product (GDP) to
rebound and grow at 9.9 per cent year-on-year in FY22 mainly due to the weak
base of FY21. Meanwhile, the Finance Ministry said banks have sanctioned loans
of about Rs 1,61,017 crore under the Rs 3-lakh crore Emergency Credit Line
Guarantee Scheme (ECLGS) for the MSME sector reeling under the slowdown caused
by the coronavirus pandemic. Finally, the BSE Sensex fell 51.88 points or 0.14%
to 38,365.35, while the CNX Nifty was down by 37.70 points or 0.33% to
11,317.35.
The US markets ended sharply
lower on Tuesday, extending the pullback seen over the course of the two
previous sessions, led by technology stocks which had driven the five month
rally, as the Nasdaq Composite booked its quickest plunge ever from a record
close to correction territory. Technology stocks helped to lead the way lower
once again, as Facebook, Amazon, Microsoft and Apple all posted steep losses on
the day. High valuations especially for technology companies, a sluggish
economic recovery in the wake of the coronavirus pandemic, geopolitical risks
including US - China tensions, and the upcoming November elections all posed
risks for investors. President Donald Trump vowed to end the country's reliance
on trade with China. Trump raised the idea of decoupling the US and Chinese
economies. He threatened to punish American companies that create jobs overseas
and to prevent those that do business in China from winning federal contracts.
Trump said we will manufacture our critical manufacturing supplies in the
United States, we will create made in America tax credits and bring our jobs
back to the United States and we will impose tariffs on companies that desert
America to create jobs in China and other countries. Meanwhile, China said it
would launch an initiative of its own to set global standards on data security,
a move seen as an attempt to counter US efforts to isolate their networks from
Chinese technology.
Crude oil futures ended deeply in
red on Tuesday on renewed worries about outlook for energy demand. Rising
tensions between the US and China, a stronger dollar and reports showing a
sharp spike in coronavirus cases across several parts of Europe sent crude oil
prices crashing down. Meanwhile, a report said that Saudi Arabia plans to cut
its oil prices in October. Crude oil futures for October dropped $3.01 or 7.6
percent to settle at $36.76 a barrel on the New York Mercantile Exchange.
November Brent crude fell $2.23 or 5.3 percent to settle at $39.78 a barrel on
London's Intercontinental Exchange.
Indian rupee ended significantly lower
against dollar on Tuesday, on increased demand for the greenback from importers
and banks. This is the second consecutive session when the rupee was traded
lower against dollar. Sentiments remained fragile as Domestic rating agency,
India Ratings and Research (Ind-Ra) in its latest report has revised its FY21
gross domestic product (GDP) growth forecast further downward to negative 11.8%
from negative 5.3% earlier. However, the rating agency said that GDP is
expected to rebound and grow at 9.9% year-on-year in FY22 mainly due to the
weak base of FY21. On the global front; pound sank to two-week lows against the
dollar on Tuesday, extending losses as fears grew that Britain is preparing to
undercut its Brexit divorce treaty and potentially torpedo its trade talks with
the European Union. Finally, the rupee ended at 73.60, 25 paise weaker from its
previous close of 73.35 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity, while they were net sellers in debt segment. In
equity segment, the gross buying was of Rs 3743.11 crore against gross selling
of Rs 3573.91 crore, while in the debt segment, the gross purchase was of Rs
374.82 crore with gross sales of Rs 562.95 crore. Besides, in the hybrid
segment, the gross buying was of Rs 34.39 crore against gross selling of Rs
70.38 crore.
The US markets closed lower for a
third straight session on Tuesday as heavyweight technology names extended
their sell-off. Asian markets are trading in red on Wednesday as the shares on
Wall Street tumbled overnight stateside. Indian markets ended with minor cuts on
Tuesday dragged by selling across most key indices, however, IT stocks and
index heavyweight RIL capped gains. Today, markets are likely to start the day
on a weak note, following negative trends in major Asian peers, coupled with
concerns over India-China tensions. Rising coronavirus cases in the country are
likely to dampen sentiments in the markets. India has recorded nearly 90,000
new Covid-19 cases in the past 24 hours. With this, the country's tally has
surged past the 4.3 million mark to 4,367,436. Death toll has climbed to
73,923. traders will also be concerned with report that the clinical trials for
the Covid-19 vaccine candidate developed by the University of Oxford, which was
expected to start at PGIMER in Chandigarh, have been delayed by at least a week
over safety approvals. There will be some cautiousness with report that the
coronavirus pandemic-stricken states have borrowed a whopping Rs 2.97 trillion
so far this financial year, which is as much as 51 per cent more than the
corresponding period a year ago. However, some support may come later in the
day with a private report that the Indian economy is expected to climb from a
deeper trough in the calendar year 2020 (CY20) and see a stronger rebound in
the year 2021. Meanwhile, Capital markets regulator Sebi added the National
Stock Exchange (NSE) to the list of entities that can undertake e-KYC Aadhaar
authentication. Aviation stocks will be in focus with a private report that
government is all set to operationalize 26 new airports and award another 12
airports for development through the public-private partnership (PPP) mode this
fiscal. There will be some reaction in insurance companies stocks with report
that life insurers have posted an almost 15% rise in first-year premium in
August thus building on the growth momentum of the previous month after a
dismal first quarter this fiscal. Besides, the IPO of Route Mobile opens for
public subscription today. The cloud communications service provider proposes
to raise Rs 600 crore through the IPO. A price band of Rs 345 to 350 apiece per
share has been fixed for the IPO that will conclude on September 11.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,317.35
|
11,259.45
|
11,406.25
|
BSE Sensex
|
38,365.35
|
38,178.38
|
38,649.41
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
762.98
|
142.30
|
139.14
|
147.54
|
State Bank of India
|
341.47
|
204.05
|
201.80
|
207.40
|
Zee Entertainment
Enterprises
|
336.61
|
213.75
|
208.75
|
222.10
|
Bharti Infratel
|
331.24
|
498.10
|
489.11
|
511.96
|
ICICI Bank
|
320.53
|
375.70
|
369.46
|
381.61
|
Dr. Reddy's Laboratories has launched Fulvestrant Injection, 250 mg/5 mL (50 mg/mL) per Single-dose Syringe, approved by the USFDA.
Wipro has entered into multi-year global agreement with Marelli for automotive engineering services.
Tech Mahindra is teaming with Amazon Web Services to build solutions based on blockchain technology.
Bharti Airtel has launched unlimited category broadband plans starting at Rs 499 per month.