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NSE Intra-day chart (20 July 2020)
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Market Commentary 21 July 2020
Markets to open in green amid firm global cues


Indian equity indices ended higher on Monday, marking the fourth successive day of gains, shrugging off weak trend in Asian markets and concerns over mounting COVID-19 cases. Markets recaptured their crucial 11,000 (Nifty) and 37,400 (Sensex) levels. Key gauges made an optimistic start and traded with a positive bias throughout session, as sentiments got a boost with Reserve Bank of India (RBI) executive director M Rajeshwar Rao's statement that future economic policies need to be modified towards supporting the economy, depending on how effects of Coronavirus disease (COVID-19) pandemic play out. Some positivity also came with the Agriculture Ministry's statement that there has been no impact of COVID-19 pandemic on kharif (summer) sowing as the total area planted to rice and other crops has increased by 21.20% to 691.86 lakh hectare so far in the current season. Separately, the latest data from the Reserve Bank of India (RBI) showed that forex reserves rose $3.1 billion to hit a record high of $516.36 billion for the week ended July 10. However, markets turned volatile and gave up some of gains in late morning session, as some cautiousness came with India Ratings and Research's (Ind-Ra) report that the government's fiscal deficit is estimated to touch 7.6% in FY21, more than double the Budget Estimate (BE), as the nation spends extra to lessen the impact of the COVID-19 pandemic while facing a shortfall in incomes. But, in the final hour of trade, domestic indices gained traction and settled over a percent higher each, as traders found support with Niti Aayog CEO Amitabh Kant's statement that clean energy has potential to shore up the Indian economy from the current downturn. He also urged investors to exploit long-term opportunities in the sector. Local investors cheered with World Federation of Direct Selling Associations' (WFDSA) The Global Direct Selling - 2019 Retail Sales report stating that the Indian direct selling industry has recorded sales of $2.47 billion in 2019, reporting a growth of 12.1 percent. This has helped the direct selling industry improve its ranking to the 15th from the earlier 19th a year before. Finally, the BSE Sensex rose 398.85 points or 1.08% to 37,418.99, while the CNX Nifty was up by 120.50 points or 1.11% to 11,022.20.


The US markets ended higher on Monday, with the Nasdaq scoring a record close, as traders cycled back into big-name tech stocks. Shares of Amazon skyrocketed by 7.9 percent after Goldman Sachs and Jefferies both raised their price targets for the online retail giant to $3,800 per share. Software giant Microsoft, Google parent Alphabet and tech giant Apple also posted standout gains. The jump by Microsoft also contributed to significant strength in the software sector, with the Dow Jones US Software Index soaring by 4.1 percent. Further, investors focused on positive developments from coronavirus vaccine candidates and talks in Washington on fresh stimulus. Meanwhile, investors looked forward to quarterly results from corporations over the coming days. However, the US coronavirus case tally rose to nearly 3.8 million on Monday and the death toll topped 140,000, as new infections continued to surge in the South and West. While the federal government has refused to mandate facial coverings, major retailers have begun to impose their own requirements. The escalation of the deadly pandemic in the US is diminishing hopes for a V-shaped, or quick and strong, economic recovery from the pandemic, as the virus taxes the public-health systems of some states and municipalities and forces local officials to restore lockdown measures to limit a more severe outbreak.


Crude oil futures ended higher on Monday as positive trial results for a coronavirus vaccine helped to offset energy-demand concerns tied to the rise in global cases of COVID-19 above 14.5 million. A potential coronavirus vaccine developed by Oxford University with AstraZeneca seems to be safe and has produced strong immune response in early-stage human trial. Also, US drugmaker Pfizer and CanSino Biologics, China, have reportedly found positive responses for their candidates. Crude oil futures for August rose 22 cents or 0.5 percent to settle at $40.81 a barrel on the New York Mercantile Exchange. September Brent crude gained 14 cents or 0.3 percent to settle at $43.28 a barrel on London's Intercontinental Exchange.


Indian rupee continued its upward momentum for the second day and ended fairly higher against US dollar on Monday, on the back of selling of the American currency by exporters. Besides, gains in domestic equity markets also provided support to the rupee. Traders were getting support with Niti Aayog CEO Amitabh Kant's statement that clean energy has potential to shore up the Indian economy from the current downturn. He also urged investors to exploit long-term opportunities in the sector. On the global front; euro retreated after hitting a 19-week high of $1.1467 on Monday after EU summit chairman Charles Michel said a recovery fund to revive economies hit by the COVID-19 pandemic could contain 390 billion euros in grants. Finally, the rupee ended at 74.91, 11 paise stronger from its previous close of 75.02 on Friday.


The FIIs as per Monday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 5366.79 crore against gross selling of Rs 4564.48 crore, while in the debt segment, the gross purchase was of Rs 946.89 crore with gross sales of Rs 881.47 crore. Besides, in the hybrid segment, the gross buying was of Rs 16.52 crore against gross selling of Rs 17.16 crore.


The US markets ended higher on Monday spurred on by a rally in tech stocks and continued optimism about the prospects of a novel coronavirus vaccine being ready for production later this year. Asian markets are trading in green on Tuesday following overnight gains on Wall Street. Indian markets ended higher on Monday as strong June-quarter results by HDFC Bank lifted investors' sentiment, adding to last week's strong IT earnings releases. Today, the start of session is likely to be optimistic following firm global cues. Traders will be getting encouragement with the preliminary data from early stages of human trials showing that the COVID-19 vaccine candidate being developed by the Oxford University and AstraZeneca is safe, well-tolerated, and immunogenic (capable of inducing an immune response). Some support will come with a labour ministry's statement that retail inflation for farm and rural workers in June eased to 7.16 per cent and 7 per cent, respectively, as compared to May this year. Also, the India Meteorological Department (IMD) in its latest forecast said rains would pick up in the next few days over north and south India. Traders may take note that Commerce and Industry Minister Piyush Goyal called upon Indian investors to play a greater role in providing funds to domestic start-ups with a view to promote the growth of budding entrepreneurs. Though, there may be some cautiousness due to rising coronavirus cases in the country. With over 36,000 new cases being reported on July 20, the total number of coronavirus cases in India has reached 1,154,917, and the country's Covid-19 death toll has reached 28,099. Market participants may be concerned with External Affairs Minister S Jaishankar's statement that Free Trade Agreements (FTA) have not served India well, and made a pitch for India to look at opportunities beyond FTAs to bolster its trade ties. There will be some buzz in the telecom stocks as the Supreme Court reserved its order in the adjusted gross revenue (AGR) case. E-commerce stocks will be in focus with Union minister Ram Vilas Paswan's statement that the new rules for electronic retailers, including mandatory display of 'country of origin' on their products, will come into force by the end of this week, and emphasised that the entities will face penal action for any non-compliance. There will be some reaction in cement stocks with ratings agency Icra's statement that cement demand is likely to de-grow by up to 25 per cent this fiscal on account of the coronavirus lockdown and subsequent specific restrictions disrupting construction activities. There will be some result announcements to keep the markets in action.


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



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  • HDFC Bank has received shareholders' approval for raising up to Rs 50,000 crore through various modes. 
  • Sun Pharmaceutical Industries is aiming to gain market share in all the verticals it is present in amid challenges posed by the coronavirus pandemic. 
  • Maruti Suzuki India is aiming to expand its CNG products range to bring in additional volumes. 
  • Cipla has reached a settlement with Amgen Inc on pending litigation involving generic cinacalcet hydrochloride tablets.
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