Indian equity benchmarks traded
in green throughout the session and ended over half a percent higher on
Tuesday, as positive cues from global markets and hopes of an early vaccine
kept the mood sanguine. Markets opened on strong note as the government data
showed the country's annual retail inflation eased slightly in August, against
expectations. India's retail inflation in August of 6.69 percent was lower than
the 6.73 percent recorded in July, but it remained above the upper end of the
Reserve Bank of India's (RBI) medium-term target for the fifth straight month.
However, markets soon trimmed most of gains in late morning session, as traders
turned wary with S&P Global Ratings stating that India's Gross Domestic
Product (GDP) is likely to contract by 9 percent in the current financial year
(FY21). Earlier, it had a projection of
5 percent de-growth in GDP for FY21. It said that rising coronavirus disease
(COVID-19) cases in the country will keep private spending and investment lower
for longer. For 2021-22 fiscal, it expects economic growth at 10 percent.
Though, benchmark indices regained traction in afternoon session, taking
support from Minister of State for Finance Anurag Singh Thakur's statement that
the lowering of corporate tax rate has made India a globally competitive and
favoured destination for investment and the impact of this landmark reform will
be felt in the coming years. The government last year slashed the base
corporation tax rate to 22 percent from 30 per cent, leading to revenue
implication of Rs 1.45 lakh crore. Market participants took note of SBI's
report that the country needs to adopt an activist fiscal policy rather than
depending on the monetary accommodation alone for turning the economic
fortunes. Meanwhile, the government has introduced a bill in the Lok Sabha to
amend the Banking Regulation Act to bring cooperative banks under the
supervision of the Reserve Bank of India (RBI) in order to protect the
interests of depositors. Finally, the BSE Sensex rose 287.72 points or 0.74% to
39,044.35, while the CNX Nifty was up by 81.75 points or 0.71% to 11,521.80.
The US markets ended higher on
Tuesday, amid continued rebound by technology stocks, with big-name companies
like Tesla, Netflix, Oracle and Facebook posting standout gains. Meanwhile, the
Federal Reserve started its policy-setting meeting on Tuesday, which will be
followed by a news conference and policy statement on Wednesday, while
central-bank decisions from the Bank of England and the Bank of Japan are due
on Thursday. The meeting of the policy-setting Federal Open Market Committee
also would be the first since the central bank introduced its new policy
framework of average-inflation targeting. Traders largely shrugged off a report
from the Fed showing growth in U.S. industrial production slowed by much more
than expected in the month of August. The Fed said industrial production
climbed by 0.4 percent in August after soaring by an upwardly revised 3.5
percent in July. Street had expected production to jump by 1.0 percent compared
to the 3.0 percent spike originally reported for the previous month. Import
prices in the US saw another notable increase in the month of August, according
to a report released by the Labor Department. The Labor Department said import
prices climbed by 0.9 percent in August after jumping by an upwardly revised
1.2 percent in July. Street had expected import prices to rise by 0.5 percent
compared to the 0.7 percent increase originally reported for the previous
month. The stronger than expected import price growth was partly due to a jump
in prices for fuel imports, which surged up by 3.3 percent in August after
soaring by 15.1 percent in July. Higher prices for both petroleum and natural
gas contributed to the advance. The report said prices for non-fuel imports
also climbed by 0.7 percent in August after edging up by 0.2 percent in July,
reflecting the biggest increase since April of 2011. Prices for non-fuel
industrial supplies and materials led the way higher, spiking by 3.6 percent.
Crude oil futures ended higher on
Tuesday s news about the stoppage of energy operations in the Gulf of Mexico
due to Hurricane Sally outweighed concerns about the outlook for energy demand.
The hurricane is reportedly approaching the northern US Gulf Coast, causing
disruptions to oil and natural gas production. The Bureau of Safety and
Environmental Enforcement estimates nearly 27% of Gulf oil production and about
28% of natural gas production have been shut down as of now. That's about 5.3%
and 2.7% more than Monday's levels. Crude oil futures for October rose $1.02 or
2.7 percent to settle at $38.28 a barrel on the New York Mercantile Exchange.
November Brent crude declined 92 cents or 2.3 percent to settle at $40.53 a
barrel on London's Intercontinental Exchange.
Indian rupee tumbled against
dollar on Tuesday, on account of sustained dollar demand from importers and
banks. Sentiments remained fragile as S&P Global Ratings states that the
India's Gross Domestic Product (GDP) is likely to contract by 9 percent in the
current financial year (FY21). Adding pessimism, Asian Development Bank (ADB)
in its latest report has predicted that India's economy is likely to contract
by 9 per cent this year -- worse than the 4 per cent contraction it had
forecast three months ago. However, ADB expects India to bounce back with 8 per
cent growth next year as the country begins to emerge from the economic
devastation caused by coronavirus (COVID-19) pandemic. On the global front;
yuan jumped to its highest in 16 months versus the dollar on Tuesday after
Chinese data pointed to an economic recovery after coronavirus-linked
shutdowns, while the dollar dipped as risk appetite improved. Finally, the
rupee ended at 73.64, 16 paise weaker from its previous close of 73.48 on
Monday.
The FIIs as per Tuesday's data
were net buyer in both equity and debt segment. In equity segment, the gross
buying was of Rs 6388.01 crore against gross selling of Rs 5788.00 crore, while
in the debt segment, the gross purchase was of Rs 866.55 crore with gross sales
of Rs 637.60 crore. Besides, in the hybrid segment, the gross buying was of Rs
28.42 crore against gross selling of Rs 54.30 crore.
The US markets ended higher on
Tuesday as investors hoped the Federal Reserve would stick with its supportive
policy stance as the central bank's two-day meeting got underway. Asian markets
are trading in green on Wednesday as investors awaited a Federal Reserve
meeting to gauge the extent of central bank support for the economic recovery.
Indian markets ended higher with gins of over half a per cent each on Tuesday,
led by buying in financial counters. Today, the markets are likely to make
pessimistic start. There will be some cautiousness with the government data showing
that contracting for the sixth straight month, India's exports slipped 12.66%
to $22.7 billion in August, on account of decline in the shipments of
petroleum, leather, engineering goods and gems and jewellery items. The trade
deficit for August this year was estimated at $6.77 billion, against $4.8
billion in July 2020 and $13.86 billion in August 2019. Also, rising
coronavirus cases may dampen sentiments in the markets. India has crossed the
grim 5-million mark by recording over 82,376 cases in the last 24 hours. With
this, India is rapidly nearing the US tally of 6.7 million. The death toll has
risen by 1,283 to 82,091. Though, some respite may come later in the day as
Chief Economic Advisor Krishnamurthy Subramanian exuded confidence that the country
would be back to a high growth path through reforms announced by the
government, after overcoming the COVID-19 pandemic. Some support may come with
a private report that consumer confidence index has shown a marginal uptick of
1.1 percentage points in September 2020. Traders may take note of Foreign
Secretary Harsh Vardhan Shringla's statement that India has received over $20
billion in FDI amid the coronavirus pandemic, showcasing the country as one of
the most attractive destinations for investment globally. Meanwhile, the
Reserve Bank of India (RBI) proposed to introduce exchange-traded and over the
counter (OTC) interest rate derivatives products that would be accessible to
both foreign investors and retail participants. There will be some reaction in
sugar stocks with report that sugar mills owed nearly Rs 13,000 crore to cane
farmers as on September 11 for the crop procured during 2019-20 marketing
season that started October last year.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,521.80
|
11,464.05
|
11,557.75
|
BSE Sensex
|
39,044.35
|
38,831.27
|
39,179.84
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
517.63
|
200.15
|
197.84
|
201.74
|
Tata Motors
|
428.88
|
148.40
|
146.84
|
149.69
|
Bharti Airtel
|
308.57
|
485.55
|
474.51
|
492.11
|
ITC
|
307.72
|
181.80
|
180.34
|
183.74
|
Wipro
|
281.56
|
307.35
|
302.99
|
311.49
|
Wipro is planning to provide commercial engineering services for the Open Network Edge Services Software toolkit globally.
Kotak Mahindra Bank has launched Kotak Digi Home Loans.
ICICI Bank has got exemption from paring stake in its life and non-life subsidiaries to 30 per cent for a period of three years.
Tata Motors' premium hatchback, Altroz is going to be the Official Partner for Dream11 Indian Premier League 2020.