Extending losses for the fifth
straight session, Indian equity benchmarks ended Wednesday's session with minor
cuts, as investors remained cautious over spiking virus infections. The benchmarks
staged a gap up opening, as India and China agreed to stop sending troops to
the front line of their disputed Himalayan border in what appears to be the
first step towards resolving the 20-week military standoff along the Line of
Actual Control (LAC) in Ladakh. Traders found some solace with ICRA's report
that India's current account will swing to a surplus of $30 billion or 1.2
percent of GDP in FY21, due to slowdown in imports during the pandemic, making
it clear that it will be a temporary phenomenon. Some support also came as
parliament passed amendments to the Banking Regulation Act to bring cooperative
banks under the supervision of the RBI, a move aimed at protecting the interest
of depositors. However, local indices pared all intra-day gains and slipped
into red terrain in afternoon deals, due to profit-booking at higher levels a
day ahead of expiry of September derivative contracts. Some anxiety also came
as the United Nations Conference on Trade and Development (UNCTAD) projected
India's economy to contract 5.9 per cent in 2020, and warned the country to not
repeat its past mistake of announcing austerity measures. It forecast the
economy to grow 3.9 per cent next year. Though, in the final hour of trading,
key gauges managed to cut the losses significantly, as some optimism remained
among traders with report that the government aims to catapult India to among
the top 10 countries in World Bank's ease of doing business rankings with the
comprehensive labour reforms which are likely to be completed after Parliament
approves three draft codes in the ongoing session. Finally, the BSE Sensex fell
65.66 points or 0.17% to 37,668.42, while the CNX Nifty was down by 21.80
points or 0.20% to 11,131.85.
The US markets ended deeply in
red on Wednesday as market participants struggled to shake off worries about a
lack of a coronavirus aid package and rising COVID-19 cases. Concerns about
surging coronavirus cases in certain parts of the world have weighed on the
markets even as President Donald Trump indicated the US would not follow the
UK's lead and implement a second round of lockdowns. The sell-off on markets
also came amid renewed weakness among technology stocks, as reflected by the
particularly steep drop by the tech-heavy Nasdaq. Big-name tech companies like
Netflix, Apple, Amazon and Alphabet all showed significant moves to the
downside. On economic front, Federal Reserve Vice Chairman Richard Clarida said
that policy makers won't contemplate raising interest rates until inflation is
clearly back at 2%-and possibly even beyond. Randal Quarles, the Fed's vice
chairman for banking supervision, said he's optimistic about the outlook but
also agreed with Fed Chair Powell that continued support will be required to
sustain a robust recovery. A September composite purchasing managers index
flash reading from IHS slipped to 54.4 in September from 54.6 in the prior
month, signaling a slower pace of growth. The flash services purchasing
managers index inched down to 54.6 from 55 in August. The flash manufacturing
index rose to 53.5 in September from 53.1 in the prior month, still marking a
20-month high.
Crude oil futures ended higher on
Wednesday, extending their previous session's gains, as US crude supplies declined
for a second week in a row. The Energy Information Administration reported that
US crude inventories fell for a second straight week, by 1.6 million barrels
for the week ended September 18. That was much less than the average forecast
from analysts polled by S&P Global Platts for a decline of 4 million
barrels. However, upside remained capped as coronavirus-related lockdowns in
Europe raising expectations for weaker energy demand. Crude oil futures for
October gained 13 cents or 0.3 percent to settle at $39.93 a barrel on the New
York Mercantile Exchange. November Brent crude added 5 cents or 0.1% to settle
at $41.77 a barrel on London's Intercontinental Exchange.
Indian rupee ended marginally
higher against dollar on Wednesday, on persistent selling of the American
currency by exporters. Traders remained positive with Industry body the
Confederation of Indian Industry's (CII) statement that the government should
extend the export incentive scheme Merchandise Exports from India Scheme (MEIS)
till December 31 in its present form to help exporters. The extension will help
address the accounting problem of exporters as they can book the receivables
under the Merchandise Exports from India Scheme in the current financial year.
However, upside remained capped with United Nations Conference on Trade and
Development (UNCTAD) stating that the contraction in the Indian economy due to
the pandemic-led disruptions may disappear next year, but it can cause some
irreversible damage to the economy. On the global front; US dollar rose against
major currencies on Wednesday, supported by positive US economic data and
concerns about a second wave of coronavirus infections in Europe and Britain.
Finally, the rupee ended at 73.57, 1 paise stronger from its previous close of
73.58 on Tuesday.
The FIIs as per Wednesday's data
were net seller in both equity and debt segment. In equity segment, the gross
buying was of Rs 4113.99 crore against gross selling of Rs 5888.78 crore, while
in the debt segment, the gross purchase was of Rs 357.31crore with gross sales
of Rs 620.72 crore. Besides, in the hybrid segment, the gross buying was of Rs
17.30 crore against gross selling of Rs 18.43 crore.
The US markets ended sharply
lower on Wednesday amid renewed weakness among technology stocks, as reflected
by the particularly steep drop by the tech-heavy Nasdaq. Asian markets are
trading under pressure on Thursday after Fed Chairman Jerome Powell reiterated
there's a long way to go for the economic rebound. Indian markets ended lower for
the fifth straight session on Wednesday as rising Covid-19 cases at home and
fears over more pandemic lockdowns in Europe dented sentiment. Today, the
markets are likely to make gap-down opening on the back of weak global cues.
Besides, the scheduled expiry of monthly derivatives is likely to keep the
session volatile. Rising coronavirus cases to dampen sentiments in the markets.
India recorded 89,688 coronavirus cases, taking its total caseload to
5,730,184. India has added over 1,000 deaths every day for 24 days. Prime
Minister Narendra Modi chaired a high-level virtual meeting with chief
ministers and health ministers of many states. During the meeting he announced
that states can spend 50 per cent of the state disaster relief fund (SDRF)
amount on efforts to check the spread of Covid-19. Also, there will be some
cautiousness with a private report that v-shaped recovery unlikely in India as
Covid cases rise. Traders will be concerned with the Department for Promotion
of Industry and Internal Trade (DPIIT) data showing that foreign direct
investment (FDI) equity inflows into India contracted by 60 per cent to $6.56
billion (Rs 49,820 crore) during April-June 2020. Traders may take note of
FICCI President's statement that the economy can be revived only by boosting
consumer sentiments, which are weak and need measures like discount vouchers
from the government to spur the pending. Though, some support may come later in
the day as Commerce and Industry Minister Piyush Goyal said that the government
has set up a National Traders' Welfare Board with the objectives of welfare of
traders and their employees, simplification of the Acts and rules applicable to
traders, reduction of compliance burden and improvement in access to funds.
Agriculture stocks will be in focus as the Commission for Agricultural Costs
and Prices (CACP) recommended a fertiliser cash subsidy of Rs 5,000 per year to
farmers. There will be some reaction in insurance stocks with a private report
that non-life insurers have witnessed 3.6 per cent growth in premiums in the
first five months of FY21, a signal that the second quarter (Q2) will be better
for the industry than Q1 when firms saw a drop in premiums.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,131.85
|
11,017.65
|
11,252.80
|
BSE Sensex
|
37,668.42
|
37,274.31
|
38,101.29
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Bharti Airtel
|
852.11
|
432.50
|
415.26
|
458.36
|
Tata Motors
|
749.83
|
131.40
|
127.30
|
136.10
|
Zee Entertainment
Enterprises
|
650.03
|
190.70
|
177.71
|
203.36
|
ITC
|
617.86
|
173.10
|
170.69
|
176.54
|
State Bank of India
|
443.22
|
184.15
|
180.45
|
188.40
|
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HDFC Life Insurance Company has entered into a bancassurance partnership with Yes Bank to sell policies to the bank's customers.
Bharti Airtel has picked up a strategic stake in tech startup Waybeo under the Airtel Startup Accelerator Program.