Extending gains to a second
straight day, Indian equity benchmarks ended the Wednesday's session with gains
of over half percent each, supported by buying interest in realty, healthcare
and auto shares. After making slightly positive start, key indices gained some
traction, as traders took some support as Chief Economic Advisor Krishnamurthy
Subramanian exuded confidence that the country would be back to a high growth
path through reforms announced by the government, after overcoming the COVID-19
pandemic. Some support also came with a private report stated that consumer
confidence index has shown a marginal uptick of 1.1 percentage points in
September 2020. However, markets trimmed some of their gains in late morning
session, as traders got anxious with the government data showing that
contracting for the sixth straight month, India's exports slipped 12.66% to
$22.7 billion in August, on account of decline in the shipments of petroleum,
leather, engineering goods and gems and jewellery items. The trade deficit for
August this year was estimated at $6.77 billion, against $4.8 billion in July
2020 and $13.86 billion in August 2019. But, benchmark indices regained their
upward momentum in second half of the session, taking support from Foreign
Secretary Harsh Vardhan Shringla's statement that India has received over $20
billion in FDI amid the coronavirus pandemic, showcasing the country as one of
the most attractive destinations for investment globally. Traders also took solace with RBI Governor
Shaktikanta Das's statement that India has seen some stabilisation in economic
activity in the ongoing fiscal's second quarter. He said that the economic
recovery will be gradual, but some of the high-frequency indicators such as
agriculture activity, manufacturing PMI, and private estimates of unemployment
point to some stabilisation of economic activity in the second quarter.
Finally, the BSE Sensex rose 258.50 points or 0.66% to 39,302.85, while the CNX
Nifty was up by 82.75 points or 0.72% to 11,604.55.
The US markets ended mostly lower
on Wednesday despite a dovish monetary policy announcement by the Fed, with the
central bank leaving interest rates unchanged and signaling rates are likely to
remain at near-zero levels for years to come. The Fed announced its widely
expected decision to keep the target range for the federal funds rate at zero
to 0.25 percent. The economic projections provided along with the announcement
suggest most Fed officials expect interest rates to remain unchanged through at
least 2023. The central bank said it expects rates to remain at current levels
until labor market conditions reach levels consistent with maximum employment
and inflation has risen to 2 percent and is on track to moderately exceed 2
percent for some time. The projections from Fed officials suggest consumer
price inflation will remain below 2.0 percent until at least 2023. The Fed's
latest estimates point to a 3.7 percent contraction in GDP in 2020, reflecting
an improvement from the 6.5 percent plunge forecast in June. On the economic
data front, a report released by the Commerce Department showed a modest
increase in US business inventories in the month of July. The Commerce
Department said business inventories inched up by 0.1 percent in July after
slumping by 1.1 percent in June. The uptick in inventories matched street
estimates. The modest rebound in business inventories came as retail
inventories jumped by 1.2 percent in July after tumbling by 2.7 percent in the
previous month. On the other hand, the report showed wholesale and
manufacturing inventories fell by 0.3 percent and 0.5 percent, respectively.
The Commerce Department also said business sales surged up by 3.2 percent in
July after soaring by 8.6 percent in June.
Crude oil futures settled higher
on Wednesday, extending gains from the previous session, after US government
data that showed an unexpectedly large weekly drop in US crude inventories. The
Energy Information Administration (EIA) has said that US crude inventories fell
by 4.4 million barrels for the week ended September 11. The EIA also reported
that crude stocks at the Cushing, Okla., storage hub edged down by about
100,000 barrels for the week. A sharp drop in US offshore output due to the
impact of Hurricane Sally, which made landfall near Gulf Shores, further
supported oil prices. Crude oil futures for October rose $1.88 or 4.9 percent
to settle at $40.16 a barrel on the New York Mercantile Exchange. November Brent
crude surged $1.69 or 4.2 percent to settle at $42.22 a barrel on London's
Intercontinental Exchange.
Indian rupee ended stronger
against dollar on Wednesday due to fresh selling of the American currency by
banks and exporters. Sentiments were optimistic as Reserve Bank of India (RBI)
has proposed allowing foreign portfolio investors (FPIs) to undertake
exchange-traded rupee Interest Rate Derivatives (IRD) transactions subject to
an overall ceiling of Rs 5,000 crore. The proposed Rupee Interest Rate
Derivatives (Reserve Bank) Directions, 2020 are aimed at encouraging higher
non-resident participation, enhance the role of domestic market makers in the offshore
market, improve transparency, and achieve better regulatory oversight. However,
upside remained capped as contracting for the sixth straight month, India's
exports slipped 12.66 per cent to $22.7 billion in August, on account of
decline in the shipments of petroleum, leather, engineering goods and gems and
jewellery items. On the global front; pound held within striking distance of a
two-month low on Wednesday before a Bank of England decision on Thursday
against the backdrop of a darkening outlook for the economy. Finally, the rupee
ended at 73.52, 12 paise stronger from its previous close of 73.64 on Tuesday.
The FIIs as per Wednesday's data
were net buyer in both equity and debt segment. In equity segment, the gross
buying was of Rs 6158.47 crore against gross selling of Rs 4303.91 crore, while
in the debt segment, the gross purchase was of Rs 1395.83 crore with gross
sales of Rs 518.82 crore. Besides, in the hybrid segment, the gross buying was
of Rs 19.55 crore against gross selling of Rs 29.07 crore.
The US markets ended mostly lower
on Wednesday as Fed Chairman Jerome Powell said the pace of the ongoing
economic recovery is expected to slow. Asian markets are trading mostly in red
on Thursday after the US Federal Reserve's policymaking committee indicated the
overnight rate could stay close to zero for years to reach its 2 percent
inflation target. Indian markets ended higher Wednesday led by gains in pharma,
auto and realty stocks amid strong global cues. Today, the markets are likely
to make negative start following weakness in the global peers. Traders will be
concerned as the Organisation for Economic Co-operation and Development (OECD)
in its Interim Economic Outlook report forecast a deeper contraction of 10.2%
for India in the current fiscal, surpassing its June estimate of -7.3% in the
event of a second wave of infections. Market participants will be anxious with
report that total tax collection of the Centre, including advance tax
collection for the second quarter, fell 22.5% to Rs 2,53,532.3 crore till
September 15 of the current fiscal as compared to the year-ago period. Also,
showing no signs of a relief, India has recorded 97,859 Covid-19 cases in just
24 hours, taking its tally past the 5.1-million mark. With this, India is
rapidly nearing the US tally of 6.8 million. Though, some support may come
later in the day with report that the government is in the process of bringing
out a strategy paper on boosting industrial growth which will be a road map for
all businesses in the country. There will be some buzz in the sugar stocks with
report that the government has extended the deadline for exporting sugar from
existing stocks by three months to December to help industry take advantage of
the global supply disruption because of the pandemic, and clear cane dues of
farmers. Aviation stocks will be in focus with DGCA data showing that passenger
load factor crossed 60 per cent in August for the first time since the
resumption of domestic flights in May this year. Industry-wise load factor or
seat occupancy was 63.2 per cent in August. There will be some reaction in
insurance industry's stocks with a private report that the lockdown imposed by
the government to contain the spread of the coronavirus in the second fortnight
of March resulted in the life insurance industry losing around 4 million
policies and premiums to the tune of Rs 45,000 crore. Meanwhile, Happiest Minds
is set to make its debut on the bourses. The issue, which was sold between
September 7 and September 9 in the price band of Rs 165-166, was subscribed 151
times.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,604.55
|
11,541.50
|
11,642.85
|
BSE Sensex
|
39,302.85
|
39,107.37
|
39,428.92
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
850.58
|
151.45
|
148.56
|
154.31
|
State Bank of India
|
524.07
|
198.20
|
196.29
|
200.09
|
ITC
|
506.46
|
180.65
|
179.30
|
182.75
|
ICICI Bank
|
220.69
|
374.70
|
367.56
|
379.26
|
NTPC
|
207.85
|
89.65
|
88.76
|
91.06
|
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Volvo Car India has partnered with HDFC Bank to launch Volvo Car Financial Services to enable buyers get easy finance for its vehicles.