Extending winning run to fourth
day, Indian equity benchmarks clocked significant gains on Tuesday, propped up
by Finance, Realty and Banking stocks amid positive global cues. Indian markets
made gap-up opening and continued positive momentum for whole day, as traders
took encouragement with Commerce Minister Piyush Goyal's statement Indian
exports will automatically increase if the products are good and competitively
priced and that products are entrepreneurs should not think that subsidies are
the only solution. Some solace also came with IT Minister Ravi Shankar Prasad's
statement that artificial intelligence (AI) has massive potential to generate
development and India is well-poised to tap into the opportunity with its large
pool of skilled professionals. He also said the proposed data protection
legislation will give a big fillip to the country's data economy. Domestic
indices witnessed a strong rally in the last hour of trade, taking support from
the survey report indicated that Indian service sector output broadly
stabilized in September. The seasonally adjusted India Services Business
Activity Index rose for the fifth straight month in September to 49.8 from 41.8
in August. But, it remained in the contraction zone as incoming new business
fell moderately due to the damaging impact of the pandemic on demand, leading
to more job losses. Meanwhile, the Centre said it will release Rs 20,000 crore
to states on account of GST compensation dues. In the meeting of the 42nd GST
Council, Finance Minister Nirmala Sitharaman said the states which received
less apportionment of Integrated GST (IGST) for 2017-18, the Centre will next
week transfer a cumulative Rs 24,000 crore to them. Finally, the BSE Sensex rose
600.87 points or 1.54% to 39,574.57, while the CNX Nifty was up by 159.05
points or 1.38% to 11,662.40.
The US markets ended lower on
Tuesday after US President Donald Trump said
that he would end negotiations on a new fiscal stimulus package sent
shivers and triggered the sell-off. Trump said he has instructed his
administration's negotiators to stop stimulus discussions with Democrats until
after the November 3 presidential election. Meanwhile, Federal Reserve Chairman
Jerome Powell said that the US economic recovery remained far from complete and
the economy needs more fiscal support. The recovery will be stronger and move
faster if monetary policy and fiscal policy continue to work side by side to
provide support to the economy until it is clearly out of the woods. In
economic data front, the US trade deficit climbed almost 6% in August to $67.1
billion, the third widest gap on record, reflecting a continuing struggle by
American exporters to recover all the ground lost in the early stages of the
coronavirus pandemic. Hiring and job
openings in the private sector fell in August in a sign the U.S. labor market
was cooling off as an economic recovery lost some of its earlier momentum.
Crude oil futures settled higher
on Tuesday, extending their previous session's rally, as investors focused on a
strike that's curtailed Norwegian output and Hurricane Delta, which has led to
production disruptions in the Gulf of Mexico. Hurricane Delta strengthened into
a extremely dangerous Category 4 storm as it took aim on the northeastern coast
of the Yucatan peninsula. It's expected to make landfall on the Gulf Coast
later this week. In preparation for Delta, the Bureau of Safety and
Environmental Enforcement estimated that 29.2% of Gulf oil production and
nearly 8.6% of natural-gas output was shut in as of Tuesday afternoon. Crude
oil futures for November rose $1.45 or 3.7 percent to settle at $40.67 a barrel
on the New York Mercantile Exchange. December Brent crude surged $1.36 or 3.3
percent to settle at $42.65 a barrel on London's Intercontinental Exchange.
Indian rupee concluded
substantially weaker against dollar on Tuesday, extending its previous session's
loss, on account of continued dollar demand from importers and banks.
Sentiments remained weak despite India's service sector activity stabilized in
the month of September, with the relaxation of coronavirus pandemic 2019
(COVID-19) restrictions. As per the survey report, the seasonally adjusted
Nikkei Services Business Activity Index rose to 49.8 in September from 41.8 in
August. Meanwhile, RBI in its latest report on 'Data on ECB/FCCB for the month
of August 2020' has showed that foreign borrowings of India Inc fell by over 47
per cent in August 2020 to $1.75 billion as compared to $3.32 billion borrowed
from overseas markets in August 2019, by way of external commercial borrowings
(ECBs). On the global front; Sterling climbed above $1.30 on Tuesday for the
first time in three weeks as investors pushed back expectations for when the
Bank of England would cut interest rates below zero. Finally, the rupee ended
at 73.46, 17 paise weaker from its previous close of 73.29 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity segment, while net sellers debt segment. In equity
segment, the gross buying was of Rs 5659.61 crore against gross selling of Rs
5318.64 crore, while in the debt segment, the gross purchase was of Rs 1105.93
crore with gross sales of Rs 1503.58 crore. Besides, in the hybrid segment, the
gross buying was of Rs 28.93 crore against gross selling of Rs 36.80 crore.
The US markets ended lower on
Tuesday after President Donald Trump called off stimulus talks until after the
November election. Asian markets are trading mixed on Wednesday following
overnight sell-off on the Wall Street. Indian markets ended at a 7-month high
on Tuesday, helped by gains in financials and auto stocks. Today, the start of
session is likely to be flat-to-positive amid mixed cues from Asian peers. Some
support will come with report that companies garnered more than Rs 1 lakh crore
from the capital markets in August, a surge of 64 percent from the preceding
month, with private placement of debt instruments emerging as the most
preferred route for financing business needs. The funds have been mopped-up
mainly for business expansion plans, loan repayments and working capital
requirements. Traders may take note of report that the Reserve Bank of India
(RBI) is widely expected to keep rates steady when its two-day monetary policy
committee (MPC) meeting concludes on October 09. The RBI said it will hold the
MPC meeting from October 7 to October 9, having delayed it by a week in order
to give the government time to appoint three new external members to the panel.
Though, there may be some cautiousness with report that the coronavirus cases in
India jumped to 7,722,746 with over 69,000 new infections reported across the
country. With 991 fatalities in 24 hours, India's death toll stands at 104,591.
Banking stocks will be in focus with Fitch Ratings' report that Indian banks
are likely to face a tough operating environment in the near term as stressed
loans and write-offs are set to increase due to the economic fallout from the
coronavirus pandemic. There will be some reaction in aviation stocks with
IATA's report that the global airline industry will burn through $77 billion in
cash during the second half of 2020 despite the resumption of flight services
amid the coronavirus pandemic. There will be some buzz in the IT services
sector stocks as Fitch Ratings said the Indian IT services sector is expected
to return to high single-digit revenue growth in 2021-2022 galvanised by higher
demand for digital transformation after a flattish 2020. Investors will focus
on the Q2 results, TCS is among the five companies scheduled to announce their
September quarter earnings later in the day.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
11,662.40
|
11,591.04
|
11,707.04
|
BSE
Sensex
|
39,574.57
|
39,302.52
|
39,735.18
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
Tata
Motors
|
1620.47
|
144.75
|
138.56
|
148.36
|
State
Bank of India
|
310.99
|
191.60
|
189.24
|
193.04
|
Wipro
|
275.80
|
330.05
|
323.60
|
335.90
|
Indusind
Bank
|
251.13
|
622.80
|
609.89
|
632.04
|
ITC
|
218.86
|
169.90
|
168.14
|
171.64
|
SBI is actively looking to hive off its digital platform Yono into a separate subsidiary.
RIL's subsidiary -- Jio Platforms with its affiliates and Infibeam Avenues have entered into a definitive agreement.
M&M has launched M-Plus Body & Paint Clinic, a specialized service camp for its customers of the passenger vehicle range.
ICICI Bank has introduced a debit card facility for customers availing the Loan Against Securities from the Bank.