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NSE Intra-day chart (29 September 2020)
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Market Commentary 30 September 2020
Markets likely to open in green on Wednesday


Indian equity benchmarks, after swinging between gains and losses, ended flat with negative bias on Tuesday, amid lack of directional cues from domestic as well as global markets. Key gauges made an optimistic start and managed to trade above neutral lines in morning session, as the Reserve Bank of India (RBI) has decided to extend by six months the enhanced borrowing facility provided to banks to meet liquidity shortage till March 31, 2021 amid the ongoing economic woes created by the coronavirus pandemic. Traders also took some solace as the Ministry of Corporate Affairs has extended the duration of several schemes till 31.12.2020 in view of the continued disruption caused due to the COVID-19 pandemic in certain parts of the country and to provide greater Ease of Doing Business. However, volatility struck bourses in late morning session, as ratings agency ICRA revised its forecast for the contraction in India's FY21 GDP to 11 per cent from its earlier assessment of 9.5 per cent. The ratings agency cited the elevated levels of Covid-19 infections at the end of Q2FY21. Domestic investors also turned cautious as the Reserve Bank has postponed the meeting of the Monetary Policy Committee (MPC), the all-important interest rate-setting panel, over a possible lack of quorum as the appointment of independent members is delayed. Trading sentiments remained in lackluster mood in late afternoon deals after the World Bank said the coronavirus pandemic is expected to lead to the slowest growth in more than 50 years in East Asia and the Pacific as well as China, while up to 38 million people are set to be pushed back into poverty. The bank said the region this year is projected to grow by only 0.9%, the lowest rate since 1967. Finally, the BSE Sensex fell 8.41 points or 0.02% to 37,973.22, while the CNX Nifty was down by 5.15 points or 0.05% to 11,222.40.


The US markets ended lower on Tuesday as investors looked ahead to the first presidential debate from Donald Trump and Democratic candidate Joe Biden, due to take place later in the day. Lingering worries about the spread of coronavirus infections and fears of fresh lockdown measures weighed on the market. Comments by a couple of Fed officials that the economy might take longer time to recover made an impact as well on stocks. Investors were also reacting to the latest updates on a coronavirus relief package. After a near one-hour conversation on Tuesday, Speaker Nancy Pelosi and US Treasury Secretary Mnuchin made plans to speak again Wednesday on their effort to deliver trillions of dollars in relief to struggling Americans just ahead of the November election. After her conversation with Mnuchin, Pelosi said she's hopeful about clinching a longshot deal. The House Democrats had released a $2.2 trillion bill for the coronavirus-relief package on Monday. On the economic data front, US trade deficit in goods rose 3.5% in August to $82.9 billion, advanced US wholesale inventories increase 0.5% on that month, while US retail inventories climbed 0.8% last month. Separately, US home prices rose 4.8% in July, up from 4.3% in the prior period, according to a three-month average reading from Case-Shiller's national price index, buttressed by superlow mortgage interest rates.


Crude oil futures ended deeply in red on Tuesday with Both WTI and Brent futures settling at their lowest front-month prices since September 15. Investors worried about rising cases of COVID-19 throughout the globe, a development that may harm appetite for oil and other energy assets in the longer-term. The global death toll from the coronavirus pandemic has surpassed one million globally, while the US accounts for more than a fifth of the nearly 33.4 million cases, with more than 200,000 deaths. Crude oil futures for November fell $1.31 or 3.2 percent to settle at $39.29 a barrel on the New York Mercantile Exchange. November Brent crude dropped $1.40 or 3.3 percent to settle at $41.03a barrel on London's Intercontinental Exchange.


Indian rupee ended lower against dollar on Tuesday, extending previous session losses, on emergence of demand for the greenback from importers. Sentiments were fragile as domestic rating agency ICRA has further revised down its Gross Domestic Product (GDP) estimate for the country and now expects the Indian economy to contract by 11 percent in FY21. The agency, which was earlier estimating a contraction of 9.5 percent, said the revision has been done as the rate of new COVID-19 infections remains elevated. However, downfall were limited as Reserve Bank of India (RBI) has decided to extend by six months the enhanced borrowing facility provided to banks to meet liquidity shortage till March 31, 2021 amid the ongoing economic woes created by the coronavirus pandemic. On the global front; dollar edged up on Tuesday, still close to 2-month highs, as markets awaited the first debate between the U.S. presidential candidates, signs of progress in U.S. fiscal stimulus talks and economic data, including German inflation. Finally, the rupee ended at 73.85, 6 paise weaker from its previous close of 73.79 on Monday.


The FIIs as per Tuesday's data were net buyers in both equity and debt segment, according to data released by the NSDL. In equity segment, the gross buying was of Rs 5637.84 crore against gross selling of Rs 5113.59 crore. In the debt segment, the gross purchase was of Rs 589.60 crore with gross sales of Rs 288.58 crore. In the hybrid segment, the gross buying was of Rs 9.06 crore against gross selling of Rs 11.57 crore.


The US markets ended lower on Tuesday ahead of the first presidential debate before the November election. Asian markets are trading mostly lower in early deals on Wednesday following the weak cues overnight from US markets ahead of the first presidential debate and as investors digested a raft of local economic data.  Indian equity markets ended flat with a negative bias on Tuesday's trading session. Today, the start of session is likely to be positive. Traders will be taking some encouragement with an aim to help state governments tide over the financial problems triggered by the Covid-19 pandemic, the Reserve Bank of India (RBI) extended by six months the additional flexibility provided to states to raise funds through market borrowing and overdraft. The RBI in April provided additional flexibility to states and Union Territories (UTs) to raise funds to deal with the Covid-19 crisis. The flexibility was available till September 30, 2020. However, there may be some cautiousness as Nobel Laureate Abhijit Banerjee said India is among the worst performing economies in the world and the government's economic stimulus was inadequate to tackle the problem. But, he said that the country will see a revival in growth in the July-September quarter of the current fiscal. He said the country's economic growth was slowing down even before the Covid-19 pandemic hit. Market participants may be concerned as private report said the steady rise in caseloads and the spillover effects of the strict lockdown measures will continue to undermine economic growth in the country. It said the recovery now is expected to be gradual as rising infections pose constraints. Even if the growth takes the form of a V-shape, the level of Gross Domestic Product (GDP) will matter. Credit growth has not picked up as envisaged. Meanwhile, the Securities and Exchange Board of India (Sebi) has extended the special dispensations given to companies wanting to go public. The regulator has said the validity of Sebi observations for initial public offerings (IPOs) expiring between October 1, 2020 and March 31, 2021 will be extended till March 31, 2021. Chemical stocks will be in focus as Chemicals & Fertilizers Minister D V Sadananda Gowda said it is a good time to invest in India's chemical sector that has huge growth potential. The minister said it is a good time to invest in India when the government is focussing on self-sufficiency in domestic production. There will be some buzz in metal stocks as India Ratings and Research (Ind-Ra) has maintained a negative outlook on the base metals sector for 2HFY21. It said business disruptions led by Covid-19 are likely to persist over the next six to nine months, as the pandemic scenario continues to evolve. Also, there will be some buzz in banking stocks as the RBI deferred the implementation of the capital conservation buffer (CCB) requiring banks to set aside additional reserves of 0.625 percent by a further six months due to the COVID-19 pandemic.


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



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  •    Infosys' wholly-owned subsidiary -- EdgeVerve Systems entered into partnership with Minit, a leader in process mining, to help clients accelerate process excellence.
  •      Maruti Suzuki India has shortlisted five new startups as part of its third cohort of the MAIL (Mobility & Automobile Innovation Lab) program.
  •      NHPC has signed PSA with CSPDCL at Raipur (Chhattishgarh) for supply of 400 MW Solar Power at the tariff of Rs 2.55/kWh for 25 years on long term basis.
  •      CRISIL has reaffirmed AAA/Stable/A1+ ratings on the bank loan facilities and debt instruments of Mahindra and Mahindra (M&M).

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