Snapping their six-session losing
run, Indian equity benchmarks displayed spirited performance on Friday by
clocking handsome gains of over two percent in the session, due to
across-the-board buying even as the risks and worries over Covid-19 and economy
remained. Key gauges traded on positive note since the beginning, as traders
took encouragement with 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, Indian equities climbed off the opening highs
in late morning deals as domestic rating agency India Ratings and Research
(Ind-Ra) has maintained a negative outlook on non-banking financial companies
(NBFCs) and housing finance companies (HFCs) for the second half of 2020-21
(2HFY21) amid Coronavirus disease (COVID-19) related business disruptions.
Though, domestic indices regained traction by adding more strength in second
half of the session, supported by stronger Asian peers on hopes of US stimulus.
Some support came in 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. Adding the optimism among the investors, International
Monetary Fund (IMF) said that Prime Minister Narendra Modi's Aatmanirbhar
Bharat is an important initiative. The economic package under this self-reliant
India initiative, which was announced in the aftermath of the coronavirus
shock, has supported the Indian economy and mitigated significant downside
risks. Finally, the BSE Sensex rose 835.06 points or 2.28% to 37,388.66, while
the CNX Nifty was up by 244.70 points or 2.26% to 11,050.25.
The US markets settled
considerably higher on Friday as technology stocks moved sharply higher, once
again attempting to rebound from recent weakness. Big-name tech stocks like
Apple, Amazon and Microsoft posted significant gains on the day. The advance by
Microsoft reflected substantial strength in the software sector, with the Dow
Jones US Software Index surging up by 2.6 percent. Notable strength also
emerged among biotechnology and healthcare stocks, with the NYSE Arca
Biotechnology Index and the Dow Jones US Healthcare Index both climbing by 1.8
percent. Within the biotech sector, Novavax (NVAX) posted a standout gain after
announcing it has initiated a Phase 3 trial of its COVID-19 vaccine candidate. Traders
largely shrugged off a report from the Commerce Department showing a much
smaller than expected increase in durable goods orders in the month of August.
The Commerce Department said durable goods orders rose by 0.4 percent in August
after soaring by an upwardly revised 11.7 percent in July. Street had expected durable
goods orders to surge up by 1.5 percent compared to the 11.4 percent spike that
had been reported for the previous month. Traders also kept an eye on
developments in Washington amid reports House Democrats plan to unveil a new
$2.4 trillion coronavirus relief bill. The price tag for the bill is $1
trillion less than a stimulus package the House passed back in May but may
still be too high for Republicans.
Crude oil futures closed slightly
lower on Friday, weighed down by concerns about the outlook for energy demand
due to rising coronavirus cases and reports of fresh lockdown measures in
several countries. Reports about the resumption of crude exports from Libya
also weighed on oil prices. Meanwhile, recent data showing a drop in crude
inventories in the US helped limit oil's decline a bit. According to Baker
Hughes, the oil-drilling rigs count in the US moved up for the first time in
three weeks, rising by 4 this week to 183. Crude oil futures for October
declined $0.06 or 0.2 percent to settle at $40.25 a barrel on the New York
Mercantile Exchange. November Brent crude lower $0.07 or 0.2 percent to settle
at $41.87 a barrel on London's Intercontinental Exchange.
Erasing prevision session losses,
Indian Rupee ended fairly higher against US dollar on Friday, on the back of
selling of the American currency by exporters. Besides, gains in domestic
equity markets also provided support to the rupee. Sentiments were buoyant as
government has extended the suspension of fresh insolvency proceedings under
the insolvency law by three months till December 25. This provides breathing
time for companies to recover from coronavirus pandemic-induced financial
stress. The six-month period of suspension, which was effective from March 25,
was to end on September 24. Meanwhile, the Reserve Bank of India (RBI) has said
it will conduct simultaneous purchase and sale of government securities under
OMO for an aggregate amount of Rs 10,000 crore each on October 1, 2020 on a
review of the current liquidity and financial conditions. On the global front;
dollar stabilised below its recent two-month highs on Friday and riskier
currencies erased some of their weekly losses, while equity markets got a lift
from hopes that US fiscal stimulus talks would resume. Finally, the rupee ended
at 73.61, 28 paise stronger from its previous close of 73.89 on Thursday.
The FIIs as per Friday's data
were net seller in both equity and debt segment. In equity segment, the gross
buying was of Rs 7132.74 crore against gross selling of Rs 8798.31 crore, while
in the debt segment, the gross purchase was of Rs 253.56 crore with gross sales
of Rs 278.69 crore. Besides, in the hybrid segment, the gross buying was of Rs
4.12 crore against gross selling of Rs 14.44 crore.
The US markets ended in green on
Friday boosted by a strong rebound in several tech giants. Asian markets are
trading higher on Monday as investors react to Chinese economic data released
over the weekend. Indian markets ended considerably higher on Friday led by
enormous buying in all key sectors amid positive momentum in the Asian peers.
Today, the start of new week is likely to be positive taking lead from Asian
peers. Investors will be focusing the Reserve Bank of India's Monetary Policy
Committee (MPC) meet which will begin from September 29 and end on October 1.
The Reserve Bank is likely to keep interest rates unchanged in the forthcoming
bilateral monetary policy review in view of the rising retail inflation driven
mainly by supply-side issues. Some support will come with the RBI data showing
that bank credit grew 5.26 per cent to Rs 102.24 lakh crore while deposits rose
11.98 per cent to Rs 142.48 lakh crore in the fortnight ended September 11.
Market participants may take note of report that India on Sunday saw over
80,000 new Covid-19 cases, a notch less than the average daily additions since
last month. Total caseload currently stands at 6,073,348. Though, traders may be
concerned as the National Council of Applied Economic Research (NCAER)
projected the economy to contract by 12.6 per cent during the current financial
year. It said all the remaining three quarters of 2020-21 were projected to
witness a fall in the gross domestic product (GDP). There may be some
cautiousness as global rating agency S&P said India's economy may
experience a record contraction in the current financial year mainly due to the
global COVID-19 pandemic, and the real GDP growth is expected to recover from
next fiscal onwards. The agency has also affirmed its BBB- long-term and A-3
short-term foreign and local currency sovereign credit ratings on India. There
will be some buzz in the agriculture stocks as Care Ratings report stated that
with yet another record food production at 301 million tonnes expected on the
back of a bumper kharif crop this year, recent MSP hikes can leave the farmers
with an additional liquidity of Rs 50,000 crore. Banking stocks will be in
focus with report that the Finance Ministry is likely to provide capital
support from the Rs 20,000 crore fund approved by Parliament in recently
concluded session to some Public Sector Banks (PSBs) in the third quarter
itself. There will be some reaction in transport, energy infra stocks as India
Ratings and Research (Ind-Ra) maintained a negative outlook on transport and
energy infrastructure for second half of the current financial year.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,050.25
|
10,912.54
|
11,130.29
|
BSE Sensex
|
37,388.66
|
36,922.39
|
37,663.04
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
650.43
|
127.25
|
124.11
|
129.36
|
State Bank of India
|
465.51
|
182.20
|
177.99
|
184.59
|
Bharti Airtel
|
336.02
|
439.65
|
426.21
|
449.01
|
ITC
|
266.28
|
170.75
|
168.10
|
172.30
|
Indian Oil Corporation
|
247.54
|
74.10
|
72.50
|
75.05
|
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