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NSE Intra-day chart (22 April 2020)
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Market Commentary 23 April 2020
Benchmarks to make optimistic start amid positive global cues


Indian equity benchmarks traded in green zone for most part of the day and ended near day's high on Wednesday, driven by heavyweight Reliance Industries which ended over 10 percent due to its subsidiary Jio Platform's deal with global social media Facebook. Markets made a cautious start amid rising coronavirus cases in the country. Traders were also concerned with a survey by FICCI-Dhruva showing that as many as 72 percent of businesses surveyed as part of a report said they expect to see a high or very high impact from the coronavirus pandemic and the steps taken to counter it. Also, ASSOCHAM-Primus Partners' joint survey showed that economic stress on the industry arising out of the nationwide lockdown forced by the Covid-19 health emergency is expected to last well beyond one quarter. However, key indices soon gained traction, as traders found support with the Central Board of Indirect Taxes and Customs (CBIC) extending the deadline to import and export goods without furnishing bonds to the Customs authorities by a fortnight till May 15, with an aim to facilitate trade during the COVID-19 lockdown. Markets continued strong bullish momentum in final hour of trade, taking support from Crisil Ratings' report that the Reserve Bank of India's (RBI) three-month suspension of EMIs could provide a liquidity breather of Rs 2.10 lakh crore if all corporates avail it. The report is based on assessment of 9,300 of its rated non-financial sector companies across 100 sectors. It said sectors with higher leverage, such as power, telecom, roads, textiles and fertilisers, will be the major beneficiaries and account for nearly 47% of the total breather available. Some optimism also came as the government advised banks to extend the interest subversion (IS) and prompt repayment incentive (PRI) benefit to all the farmers whose accounts become due during March 1 to May 31 period. Positive cues from global markets too lifted investor sentiment. Separately, to ease fundraising for stressed companies, markets regulator Sebi proposed easier pricing guidelines under the preferential route and exemption from making an open offer for the allottees of such issue. Finally, the BSE Sensex gained 742.84 points or 2.42% to 31,379.55, while the CNX Nifty was up by 205.85 points or 2.29% to 9,187.30.


The US markets ended higher on Wednesday as investors gained confidence from stabilizing crude oil markets, some better-than-expected corporate earnings reports. The jump in oil prices contributed to considerable strength among energy stocks, with the NYSE Arca Oil Index and the Philadelphia Oil Service Index surging up by 4.8 percent and 2.9 percent, respectively. Buying interest was also generated in reaction to report that the Senate has passed a new bill to provide funding for hospitals and small businesses and expand coronavirus testing. The $484 billion aid package was approved unanimously by the Senate and now heads to the House, which could approve the bill as soon as Thursday. President Donald Trump has said he will sign the bill and then plans to begin discussions on additional legislation to provide fiscal relief for states and local governments, increase infrastructure spending, provide tax incentives for restaurants and entertainment businesses and cut payroll taxes. Gold stocks turned in some of the market's best performances on the day, driving the NYSE Arca Gold Bugs Index up by 6.9 percent to its best closing level in well over three years. Significant strength was also visible among semiconductor stocks, as reflected by the 5.9 percent spike by the Philadelphia Semiconductor Index.


Crude oil futures ended higher on Wednesday, rebounding from recent big setbacks that resulted in the front month contract plunging to sub-zero levels for the first ever time in history, as a rise in US-Iran tensions. Trump said that he has instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass US' ships at sea. However, the Energy Information Administration (EIA) reported that US crude inventories rose 15 million barrels for the week ended April 17 to 518.6 million barrels. That marked a 13th straight weekly climb and followed a record weekly increase of 19.2 million barrels a week earlier. Crude oil futures for June surged $2.21 or 19.1 percent to settle at $13.78 a barrel on the New York Mercantile Exchange. June Brent crude rose $1.04 or 5.4 percent to settle at $20.37 a barrel on London's Intercontinental Exchange.


Reversing its two-session fall, Indian rupee bounced back to end higher against the US currency on Wednesday, on persistent selling of the American currency by exporters. Traders took a note of report that the Reserve Bank of India (RBI) has increased the short-term borrowing capacity of the central government by over 65% to temper market fears that excessive borrowing by the government to fight Covid-19 could put pressure on interest rates. Positive trend in domestic equities and dollar losing shine against major currencies also supported the local unit. On the global front, euro edged higher against dollar on Wednesday as hotspot Italy looked set to relax strict curbs put in place to contain the coronavirus, with investors remaining cautious about a swift recovery as more companies issued worrying financial forecasts. Finally, the rupee ended at 76.68, 15 paise stronger from its previous close of 76.83 on Tuesday.


The FIIs as per Wednesday'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 4302.47 crore against gross selling of Rs 6133.32 crore, while in the debt segment, the gross purchase was of Rs 1002.61 crore with gross sales of Rs 588.29 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.61 crore against gross selling of Rs 8.25 crore.


The US markets ended in green on Wednesday amid report that the Senate has passed a new bill to provide funding for hospitals and small businesses and expand coronavirus testing. Asian markets are trading mostly higher on Thursday after rebounding crude prices and the promise of more US government aid to ease the economic pain inflicted by the coronavirus crisis helped calm global equity markets. Indian markets ended higher on Wednesday supported by gains in Reliance Industries, as it alone contributed 100 bps to the indices. Today, the start of session is likely to be optimistic with positive leads from global markets. Also, sentiments are likely to be positive with anticipation of another stimulus package from the government, in the wake of novel coronavirus outbreak. Principal Economic Adviser Sanjeev Sanyal has said more calibrated monetary and fiscal stimulus measures are on the anvil to deal with the economic fallout from COVID-19 and the consequent lockdown. Investors will be looking ahead to the two-day (April 23-24) meeting of the economic advisory council which is expected to deliberate on the impact of the Covid-19 pandemic on economic growth in this fiscal year and the next. Traders may take note of report that to ease fundraising for stressed companies, markets regulator SEBI has proposed easier pricing guidelines under the preferential route and exemption from making an open offer for the allottees of such issue. Though, there may be some cautiousness with the World Bank's statement that as a result of the deadly coronavirus pandemic, which has resulted in a global recession, remittances to India are likely to drop by 23% from $83 billion last year to $64 billion this year. Meanwhile, the Centre has slashed the subsidy on non-urea fertilisers, a move that would reduce the burden on the exchequer to Rs 22,186.55 crore in this fiscal amid the COVID-19 outbreak. There will be some buzz in the MSME stocks as SIDBI launched a liquidity support scheme for micro, small and medium enterprises (MSMEs) impacted by the COVID-19 outbreak. Agriculture related stocks will be in focus as the Centre set the wheat procurement target at 40.7 million tonnes for the 2020-21 marketing year (April-March) as the country is expected to harvest a record 106.21 million tonnes of the grain this year. There will be some reaction in metal stocks with World Steel Association data showing that global crude steel production fell 6% to 147.1 million tonnes in March from a year earlier, as the coronavirus crisis forced the closure of furnaces. There will be some result announcements to keep the markets in action.   


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



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  • Larsen & Toubro's construction arm -- L&T construction has bagged orders from prestigious clients in India for buildings & factories business. 
  • Coal India's Subsidiary--Western Coalfields has launched a roadmap to achieve beyond 75 million tonnes of output by FY23.
  •  Reliance Industries' wholly-owned subsidiary -- Jio Platforms and Facebook, Inc. have signed binding agreements for an investment of Rs 43,574 crore by Facebook into Jio Platforms. 
  • Tata Steel has raised Rs 510 crore and allotted 5,100 - 7.85% Unsecured, Redeemable, Rated, Listed NCDs having face value of Rs 10 lakh each to identified investor on private placement basis.
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