Falling for the sixth straight
session, domestic equity benchmarks have witnessed massive selling pressure and
settled near day's low point on Thursday, following a heavy selloff in global equities
as fears of fresh pandemic restrictions kept domestic investors jittery. All
sectoral indices also witnessed deep cuts led by the IT, TECK, Auto and Metal
indices down around 4% percent each. Key gauges opened on a negative note and
stayed in red for whole day, as traders were anxious with the Department for
Promotion of Industry and Internal Trade (DPIIT) in its latest data showed that
foreign direct investment (FDI) equity inflows into India contracted by 60 per
cent to $6.56 billion (Rs 49,820 crore) in first quarter of current financial
year (Q1FY21). The overseas inflows during April-June 2019 stood at $16.33
billion. Market participants also took a note of the Federation of Indian
Chambers of Commerce & Industry (FICCI) President Sangita Reddy'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. Sentiments remained downbeat with a report by rating agency S&P
pointed out that India's banking system will be among the last in the world to
recover from disruptions caused by the covid-19 pandemic. It said we have taken
negative rating actions on Indian banks and non-banking financial institutions
(NBFIs) as operating conditions have deteriorated through the crisis. The
country entered the pandemic with an overhang of high nonperforming assets. The
key indices also suffered due a sinking rupee which slipped 32 paise to quote
at 73.89 against the US dollar. Separately, Commerce and Industry Minister
Piyush Goyal has said that the government is in the process of finalizing a
National Logistics Policy which will help bring down logistics cost
significantly. He noted that stakeholder consultations are being held for the
same. Finally, the BSE Sensex fell 1114.82 points or 2.96% to 36,553.60, while
the CNX Nifty was down by 326.30 points or 2.93% to 10,805.55.
The US markets ended marginally
higher on Thursday even as volatility continued to be the dominant force in
Wall Street's tumultuous September. The choppy trading on markets came
following the release of a mixed batch of US economic data, which added to
recent uncertainty about the economic outlook. The Labor Department released a
report showing an unexpected uptick in first-time claims for US unemployment
benefits in the week ended September 19th. The report said initial jobless
claims inched up to 870,000, an increase of 4,000 from the previous week's
revised level of 866,000. The modest increase surprised economists, who had
expected jobless claims to drop to 843,000 from the 860,000 originally reported
for the previous week. Meanwhile, the Commerce Department released a separate
report unexpectedly showing another significant increase in new home sales in
the US in the month of August. The Commerce Department said new home sales
jumped by 4.8 percent to an annual rate of 1.011 million in August after
skyrocketing by 14.7 percent to an upwardly revised rate of 965,000 in July.
Street had expected new home sales to pull back by 1.2 percent to a rate of 890,000
from the 901,000 originally reported for the previous month. With the
unexpected increase, new home sales surged up to their highest level since
reaching 1.016 million in September of 2006.
Crude oil futures ended higher on
Thursday despite lingering worries about the energy demand outlook in the wake
of rising COVID-19 cases and fresh lockdown measures in several parts across
Europe. The UK, France and Germany have all been reporting spikes in new cases
of coronavirus infections, and several countries in Europe, including these
three, have imposed new restrictions. Meanwhile, the US Energy Information
Administration reported that domestic supplies of natural gas rose by 66
billion cubic feet for the week ended September 18. That was smaller than the
increase of 77 billion cubic feet forecast by analysts polled by S&P Global
Platts. Crude oil futures for October gained 38 cents or 1 percent to settle at
$40.31 a barrel on the New York Mercantile Exchange. November Brent crude rose
17 cents or 0.4% to settle at $41.94 a barrel on London's Intercontinental
Exchange.
Indian rupee ended considerably
lower against dollar on Thursday on emergence of demand for the greenback from
importers. Selloff in domestic equities, significant foreign fund outflows,
feeble global cues coupled with increasing Covid-19 cases also dented the
sentiments. A series of warnings from the US central bank officials about a
recovery from the coronavirus pandemic hurt investors' sentiment globally.
Sentiments also got hit as Department for Promotion of Industry and Internal
Trade (DPIIT) in its latest data has said that the foreign direct investment
(FDI) equity inflows into India contracted by 60 per cent to $6.56 billion (Rs
49,820 crore) in first quarter of current financial year (Q1FY21). The overseas
inflows during April-June 2019 stood at $16.33 billion. On the global front;
dollar reached a two-month high on Thursday as concern grew over the resilience
of an economic recovery in the United States and Europe amid a second wave of
coronavirus infections. Finally, the rupee ended at 73.89, 32 paise weaker from
its previous close of 73.57 on Wednesday.
The FIIs as per Thursday's data
were net seller in equity, while net buyer in debt segment. In equity segment,
the gross buying was of Rs 4239.49 crore against gross selling of Rs 8121.54
crore, while in the debt segment, the gross purchase was of Rs 314.03 crore
with gross sales of Rs 125.80 crore. Besides, in the hybrid segment, the gross
buying was of Rs 4.41 crore against gross selling of Rs 16.80 crore.
The US markets ended higher on
Thursday as beaten-down technology shares gained favor. Asian markets are
trading in green on Friday after robust US housing data supported a late tech-driven
rally on Wall Street. Indian markets ended Thursday's session lower for sixth
consecutive session following steep losses in Asian peers amid weak global
cues. Today, the markets are likely to get optimistic start tacking firm cues
from Asian peers and overnight gains on Wall Street. Some support will come
with report that the Reserve Bank of India (RBI) has announced it will conduct
simultaneous purchase and sale of government securities under open market
operation (OMO) for an aggregate amount of Rs 10,000 crore each on October 1.
Traders may take note of report that the government has extended the suspension
of insolvency proceedings for any COVID-19 related default by a period of three
months, effective from September 25. The Insolvency & Bankruptcy Code (IBC)
was suspended for a period of six months with effect from March 25, 2020, by
the government earlier, to protect those experiencing financial distress on
account of the pandemic. However, there may be some cautiousness with rising
coronavirus cases in the country. India on Thursday recorded 85,919 coronavirus
cases, taking its total caseload way past the 5.8-million mark. India has added
over 1,000 deaths on each of the past 25 days. Meanwhile, the Centre has
permitted five states to go for additional borrowing of Rs 9,913 crore through
Open Market Borrowings (OMBs) to meet their expenditure requirements amid
falling revenues due to the COVID-19 crisis.
These states are Andhra Pradesh, Telangana, Goa, Karnataka and Tripura.
Banking stocks will be in limelight with S&P Global Ratings' report that
the Indian banking system will be one of the slowest to return to 2019 levels,
and full recovery might stretch beyond 2023. There will be some buzz in the
MSME stocks as the Finance Ministry said banks have sanctioned loans of about
Rs 1.77 lakh crore to 44.2 lakh business units under the Rs 3-lakh crore
Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector reeling
under the slowdown caused by the coronavirus pandemic. NBFCs and HFCs stocks
will be in focus as domestic rating agency India Ratings and Research
maintained a negative outlook on non-banking financial companies (NBFCs) and
housing finance companies (HFCs) for the second half of 2020-21. There will be
some reaction in pharma stocks with ratings agency CRISIL's statement that
higher exports will help the Indian pharmaceutical sector come out unscathed
from the coronavirus pandemic and deliver a marginally lower 9 per cent revenue
growth.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,805.55
|
10,725.40
|
10,950.50
|
BSE Sensex
|
36,553.60
|
36,264.96
|
37,073.24
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Zee Entertainment
Enterprises
|
763.17
|
190.35
|
183.54
|
196.49
|
Tata Motors
|
624.24
|
122.80
|
120.36
|
127.01
|
Bharti Infratel
|
535.14
|
169.10
|
162.31
|
175.76
|
State Bank of India
|
461.15
|
176.35
|
173.96
|
180.26
|
Bharti Airtel
|
357.87
|
419.30
|
412.46
|
429.81
|
Mahindra & Mahindra has increased its shareholding in Sampo Rosenlew from 49.14% to upto 74.97%.
TCS has partnered with Maurices to help create a new flexible and scalable IT landscape for the latter.
Tata Motors' wholly owned subsidiary -- JLR is going to launch its iconic SUV Land Rover Defender in India.
HDFC is planning to raise up to Rs 5,000 crore by issuing bonds on a private placement basis.