Indian stock markets ended
Friday's volatile session in the negative territory, as relentless rise in
Covid-19 cases both in India as well as on the global front weighed on investor
sentiment. Sensex and Nifty settled below their crucial 36,600 and 10,800
levels, respectively. Key indices opened in red and stayed in the negative
terrain for whole trading session, following the bearish cues from the other
Asian markets. Traders remain concerned with a private report that India's GDP
will contract by 3 percent in FY21 because of the coronavirus pandemic,
assuming the economy is opened up fully from next month. It also said the RBI
will monetise the fiscal deficit through purchase of government bonds of up to
$95 billion through open market operations, and its revaluation reserves of
$127 billion may also be used to recapitalise state-run banks. However, key
gauges showed some signs of revival in the late afternoon session, taking
support from Principal Economic Adviser Sanjeev Sanyal's statement that the
government will undertake measures to boost demand and there is both monetary
and fiscal headroom available. He stated that economic activity is steadily
getting back on track. Sanyal indicated that the Reserve Bank of India (RBI)
may cut interest rates further as a monetary policy tool to improve demand.
Traders also took a note of report that Prime Minister Narendra Modi, in an
effort to woo global investors, said that India has massive opportunities in various
sectors such as defence, agriculture, and MSMEs. He emphasized on the
opportunity that India provides, being one of the fastest-growing economies in
the world. But, domestic bourses failed to carry the momentum and settled in
red, as cautiousness remained in the markets ahead of Index of Industrial
Production (IIP) data, which is scheduled to be announced post market hours.
Finally, the BSE Sensex fell 143.36 points or 0.39% to 36,594.33, while the CNX
Nifty was down by 45.40 points or 0.42% to 10,768.05.
The US markets ended considerably
higher on Friday after Gilead Sciences (GILD) said remdesivir showed a sharp
mortality risk drop when used to treat patients suffering of coronavirus.
BioNTech's CEO also said the German biotechnology company's coronavirus vaccine
candidate could be ready for approval by December. The upbeat treatment and
vaccine news overshadowed the reports that the US saw a record number of new
infections of COVID-19, rising by more than 63,000 to mark another single-day
record, as hospitals in Texas, California and other states also saw rising
hospitalizations from the illness. Total US cases of coronavirus climbed to
more than 3.1 million and the death toll topped 133,000, according to data
compiled by Johns Hopkins University. Separately, China said that it would
impose reciprocal sanctions against US officials after the US imposed sanctions
on individuals and institutions for human rights abuses of Uighurs, a mostly
Muslim ethnic minority living in China's Xinjiang province. In economic data,
the wholesale cost of US goods and services fell by 0.2% in June, reflecting
depressed demand in retail and other major parts of the economy caused by the
coronavirus pandemic. Looking forward, investors are bracing for corporate
earnings reports, which will kick off in earnest next week, with the banking
sector slated to deliver quarterly results that are likely to be
disappointing.a
Crude oil futures ended notably
higher on Friday taking support with an upward revision energy demand forecast
by the International Energy Agency (IEA). The IEA says in its report that the
worst of the oil market downturn from the coronavirus pandemic has passed. The
agency has raised its demand forecast to 92.1 million barrels per day, up
400,000 barrels per day from its outlook last month, citing a
smaller-than-expected second-quarter decline. A report from Baker Hughes said
US oil rigs fell by four to 181 this week, their lowest since June 2009, while
gas rigs dropped by one to 75, matching its record low hit a couple of weeks
ago. Oil rigs count fell by 3 last week. Meanwhile, according to Baker Hughes'
report, the total active US rig count fell by 5 to 258. Crude oil futures for
August rose 93 cents or about 2.4 percent to settle at $40.55 a barrel on the
New York Mercantile Exchange. September Brent crude added 89 cents or 2.1
percent to settle at $43.24 a barrel on London's Intercontinental Exchange.
Indian rupee depreciated against
dollar on Friday, on account of sustained dollar demand from importers and banks.
Sentiments impacted with a private report that India's GDP will contract by 3
percent in FY21 because of the coronavirus pandemic, assuming the economy is
opened up fully from next month. It also said the RBI will monetise the fiscal
deficit through purchase of government bonds of up to $95 billion through open
market operations, and its revaluation reserves of $127 billion may also be
used to recapitalise state-run banks. On the global front, dollar paused on
Friday as concerns about a surge in coronavirus infections in the United States
and elsewhere supported the safe haven Japanese yen, while risk-sensitive
currencies lost ground. Finally, the rupee ended at 75.02, 21 paise weaker from
its previous close of 74.99 on Thursday.
The FIIs as per Friday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 7659.97 crore against gross
selling of Rs 4282.66 crore, while in the debt segment, the gross purchase was
of Rs 420.37 crore with gross sales of Rs 1939.56 crore. Besides, in the hybrid
segment, the gross buying was of Rs 1.70 crore against gross selling of Rs
16.84 crore.
The US markets ended higher on
Friday amid reports about a potential coronavirus treatment increased hope for
an economic recovery following the outbreak. Asian markets are trading mostly
in green on Monday as investors wagered US earnings season would see most
companies beat forecasts given expectations had been lowered so far by
coronavirus lockdowns. Indian markets ended lower on Friday as a relentless surge
in domestic coronavirus cases threatened to disrupt an economic recovery, with
financials falling the most. Today, the start of new week is likely to be
optimistic following positive cues from Asian peers and ahead of retail
inflation data to be announced later in the day. Traders will be taking
encouragement with Commerce and Industry Minister Piyush Goyal's statement that
the government is looking at reforms in various sectors like foreign direct
investment, mining, banking and capital market to promote economic activities
in the country. Some support will come with agriculture ministry's statement
that the government is on track to achieving the target of doubling farmers'
income by 2024 and recent farm reforms, including setting up of a Rs 1 trillion
agri-infra fund, are steps in that direction. Traders may take note of the
International Monetary Fund's (IMF) statement that given the severity of the
country's economic situation due to the COVID-19 pandemic, there is a scope for
more near term fiscal support in India, especially for vulnerable households
and SMEs. However, rising coronavirus cases may impact the investors'
sentiment. India has recorded nearly 29,000 new cases in a day - the biggest
spike in daily cases so far - taking its total number of Covid-19 cases to
879,466. There may be some cautiousness as Industry body FICCI in its Economic
Outlook Survey has projected the country's annual median GDP growth for 2020-21
at (-) 4.5%. Besides, the government has held back the release of complete industrial
production data for the second straight month in May in view of the impact of
the coronavirus-induced lockdown. The Ministry of Statistics and Programme
Implementation has released quick estimates of the Index of Industrial
Production (IIP) which showed the index value at 88.4 in May against 53.6 in
April, indicating a graded pickup in industrial activity. There will be some
buzz in the telecom stocks as telecom regulator TRAI notified certain changes
to the telecom interconnection rules, paving the way for easier
interconnectivity between any two fixed-line networks and between fixed-line
and national long distance networks. There will be some reaction in auto
component sector stocks with ratings agency ICRA's statement that weak demand
across domestic original equipment manufacturers, replacement market and
exports could lead to a decline of 14-18 percent in revenues of auto component
sector in 2020-21. Meanwhile, specialty chemicals company Rossari Biotech will
launch its Rs 500-crore IPO today, ending a four-month lull in the primary
market.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,768.05
|
10,714.23
|
10,820.63
|
BSE Sensex
|
36,594.33
|
36,414.00
|
36,761.78
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
1,114.10
|
195.60
|
192.77
|
200.47
|
Tata Motors
|
646.95
|
107.60
|
105.80
|
109.00
|
ICICI Bank
|
278.66
|
360.35
|
356.83
|
366.03
|
IndusInd Bank
|
269.65
|
539.25
|
529.62
|
551.67
|
Axis Bank
|
256.76
|
439.60
|
433.92
|
448.37
|
Reliance Industries and bp have started their new Indian fuels and mobility joint venture, Reliance BP Mobility.
Coal India has lined up Rs 10,000 crore as capital expenditure for the current financial year.
ITC has incorporated a wholly owned subsidiary company namely ITC IndiVision on July 9, 2020.
SBI is going to consider raising of AT1 and Tier 2 capital by way of issuance of Basel III compliant debt instrument in USD and/or INR during FY 21.