Indian equity benchmarks slipped
from day's high but still ended in the positive territory on Monday on the back
of positive global cues, encouraging quarterly numbers by select pharma
companies. Markets started this week's trading with gains of around a percent
each, as traders took encouragement with Niti Aayog CEO Amitabh Kant's
statement that India's FDI regime is the most liberal in the world, and even
during the COVID-19 pandemic, the country has attracted over $22 billion worth
of direct investments. Sentiments also got boost after Prime Minister Narendra
Modi launched financing facility of Rs 1 lakh crore under the Agri-Infra Fund
that will help create post-harvest infrastructure in villages and generate
jobs. Adding the optimism among investors, Union minister Nitin Gadkari has
urged the industry to identify the sectors heavily reliant on imports,
particularly from China, and look for substitutes towards indigenous production
to make India a super power. Domestic markets maintained their upward momentum
in the afternoon session, with Commerce and Industry Minister Piyush Goyal's
statement that the world is looking for trusted partners where there is rule of
law, transparency in systems, strong judiciary and democratic traditions, and
India can become a key player in global supply chains as it provides all of
these. He said India has to engage with the world with competitive prices,
high-quality products, large scale economies of manufacturing, high productivity
levels, but not on the crutches of government subsidies. However, markets
trimmed most of their initial gains to come off day's high in late afternoon
session, despite Crisil Ratings' report stated that one-time restructuring of
corporate loans, which are facing stress due to coronavirus-induced
disruptions, announced by the Reserve Bank of India (RBI) is likely to ease
liquidity pressure for companies. Finally, the BSE Sensex gained 141.51 points
or 0.37% to 38,182.08, while the CNX Nifty was up by 56.10 points or 0.50% to
11,270.15.
The US markets ended mostly
higher on Monday after President Donald Trump signed executive orders aimed at
extending coronavirus relief to Americans. The executive orders include an
extension of expanded unemployment benefits, a deferral of student loan
payments through 2020, a federal moratorium on evictions and a payroll tax
holiday. Trump signed the orders as lawmakers continue to struggle to reach an
agreement on a new coronavirus relief package. However, the orders are likely
to face legal challenges, as Congress controls the funding needed to continue
the programs. Meanwhile, US-China tensions intensified, with Beijing announcing
unspecified sanctions against 11 US politicians and heads of organizations
promoting democratic causes, including additional measures targeting Sens.
Marco Rubio and Ted Cruz, who already were subject to a travel ban. Though,
airline stocks showed a substantial move to the upside on the day, driving the
NYSE Arca Airline Index up by 5 percent. The rally by airline stocks came as
federal data showed the number of people passing through Transportation
Security Administration checkpoints at US airports rose to the highest level since
March 17 on Sunday.
Crude oil futures ended higher on
Monday as optimism about energy demand rose a bit after somewhat encouraging
factory data from China, and hopes about coronavirus-related stimulus in the
US. Meanwhile, Saudi Arabian Aramco Chief Executive Nasser said the company has
seen signs of a recovery in global oil demand as economies gradually open up.
Nasser added crude consumption in Asia is almost back to pre-Covid-19 levels. Crude
oil futures for September surged 72 cents or 1.8 percent to settle at $41.94 a
barrel on the New York Mercantile Exchange. October Brent crude rose 59 cents
or 1.3 percent to settle at $44.99 a barrel on London's Intercontinental
Exchange.
Indian rupee ended marginally
higher against dollar on Monday as banks and exporters continued to sell the US
currency amid persistent capital inflows. This is the second consecutive
session when the rupee is traded higher against dollar. Sentiments remained
optimistic as overseas investors remained net buyers in Indian markets by
investing a net Rs 8,327 crore in the first week of August amid better than
expected results by big Indian companies. Foreign portfolio investors (FPI)
invested a net Rs 7,842 crore in equities and Rs 485 crore in the debt segment
between August 3-6. Support also came in as Niti Aayog CEO Amitabh Kant said
that the India's FDI regime is the most liberal in the world, and even during
the COVID-19 pandemic, the country has attracted over $22 billion worth of
direct investments. On the global front; dollar rose on Monday, including
versus the euro and Swiss franc, with investors focusing on fiscal stimulus in
the United States and U.S.-China tensions ahead of key trade talks on August
15. Finally, the rupee ended at 74.90, 3 paise stronger from its previous close
of 74.93 on Friday.
The FIIs as per Monday's data
were net buyers in both equity and debt segment. In equity segment, the gross
buying was of Rs 6499.43 crore against gross selling of Rs 5192.95 crore, while
in the debt segment, the gross purchase was of Rs 2060.95 crore with gross
sales of Rs 1167.75 crore. Besides, in the hybrid segment, the gross buying was
of Rs 552.33 crore against gross selling of Rs 476.54 crore.
The US markets ended mostly
higher on Monday as investors extended a rotation into value stocks from
heavyweight tech-related names while awaiting news on progress in a US fiscal
support bill. Asian markets are trading in green on Tuesday as New York,
California and Texas reported a drop in coronavirus hospitalizations and
investors assessed the progress in US stimulus talks between Democrats and
Republicans. Indian markets ended higher on Monday contributed by the gains in
pharma, auto and financial stocks. Today, the start of session is likely to be
positive following firm trade in Asian peers. Investors are eyeing the
industrial output data for June scheduled to be released later in the day.
Traders will be getting encouragement with Commerce and Industry Minister
Piyush Goyal's statement that India's balance of payments this year is going to
be very, very strong on the back of significant improvement in exports and a
fall in imports. Some support will come in with report that India's recovery
rate from Covid-19 improving. India recorded 54,859 recoveries on August 10,
the highest till date. Daily new recoveries have grown to the range of 40,000
to 50,000 in a day, much higher than the previous month's range of 20,000 to 40,000
a day. Besides, Union Minister Nitin Gadkari said the government is working on
the idea of a land bank and a social microfinance institution to help people
run small shops and businesses. Though, traders may be concerned with private
report that on August 10, India reported over 1,000 fatalities for the second
time. Daily new deaths have been consistently on the rise. There may be some
cautiousness with ratings agency ICRA's report that the coronavirus pandemic
will significantly impact performance of companies and it is likely to be
severe and prolonged for select sectors, especially aviation, hospitality and
retail. It added the pandemic, followed by extended lockdowns in India both
nationally and then localised, has impacted India Inc for the major part of the
first quarter of the current financial year. Meanwhile, the commerce ministry's
investigation arm DGTR has recommended imposition of provisional anti-dumping
duty on PET resin chemical from China to guard domestic players from cheap
imports. Auto stocks will be in focus with data from The Federation of
Automobile Dealers Associations (FADA) showing that total auto vehicle
registrations dropped by 36.27 per cent to 1,142,633 units from 1,792,879
units, a year ago. There may be some reaction in defence stocks with Defence
Minister Rajnath Singh's statement that the government will unveil more steps
to attract investment in defence manufacturing so that India can produce
world-class military platforms and weapons systems. There will be some earnings
announcements too to keep the markets buzzing.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,270.15
|
11,226.34
|
11,325.64
|
BSE Sensex
|
38,182.08
|
38,026.69
|
38,384.09
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
Tata Motors
|
710.96
|
123.85
|
120.80
|
125.80
|
Cipla
|
568.96
|
795.60
|
759.80
|
822.95
|
State Bank of India
|
487.85
|
193.80
|
191.84
|
195.64
|
ICICI Bank
|
228.57
|
363.55
|
358.95
|
366.55
|
ITC
|
164.75
|
198.85
|
196.95
|
200.20
|
Tata Motors has launched a range of health and hygiene accessories for its customers.
ONGC has cut its debt by more than one-third but faces an uphill challenge to meeting planned expenditure during FY21.
UltraTech Cement is expecting a subdued performance in the wake of weak real estate and overall slowdown in the economy coupled with the impact of the coronavirus pandemic.
Coal India has revised its production target to 650-660 million tonne for 2020-21 fiscal in the wake of disruptions caused by the COVID-19 pandemic.