Javeri Fiscal Services Ltd. Daily Newsletter
NSE Intra-day chart (21 July 2020)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 22 July 2020
Benchmarks likely to make flat-to-positive start on Wednesday

 

Extending northward journey for fifth straight session, Indian equity benchmarks ended Tuesday's session with healthy gains of over a percent, amid a firm trend in global markets on hopes of a COVID-19 vaccine. Sensex and Nifty closed above their crucial 37,900 and 11,150 levels, respectively. Sentiments remained jubilant since morning with frontline gauges started the session with gap-up opening as traders reacted positively to the preliminary data from early stages of human trials showing that the COVID-19 vaccine candidate being developed by the Oxford University and AstraZeneca is safe, well-tolerated, and immunogenic (capable of inducing an immune response). Sentiments also remained up-beat with a labour ministry's statement that retail inflation for farm and rural workers in June eased to 7.16 per cent and 7 per cent, respectively, as compared to May this year. Traders also took note that Commerce and Industry Minister Piyush Goyal called upon Indian investors to play a greater role in providing funds to domestic start-ups with a view to promote the growth of budding entrepreneurs. Buying got intensified in the late afternoon session, as sentiments remained buoyant with the India Meteorological Department (IMD) in its latest forecast said rains would pick up in the next few days over north and south India. Adding the optimism among the market participants, Employees' Provident Fund Organisation (EPFO) in its latest Provisional Estimate of Net Payroll data report has showed that India created 318789 new jobs in the month of May 2020 as against revised figure of 100825 in April 2020. Encouraging and better-than-expected earnings by corporates along with rupee's appreciation against dollar also provided support to the markets. Investors overlooked External Affairs Minister S Jaishankar's statement that the free trade agreements (FTAs) that India entered into over the years have not been able to largely serve the country's economy well in terms of building its capacities, though all such pacts are not the same. Finally, the BSE Sensex rose 511.34 points or 1.37% to 37,930.33, while the CNX Nifty was up by 140.05 points or 1.27% to 11,162.25.

 

The US markets ended mostly higher on Tuesday as investors snapped up beaten-down energy and financial stocks amid a slate of corporate earnings reports, including Coca-Cola and Lockheed Martin's second-quarter results. Coca-Cola posted a notable gain after the beverage giant reported better than expected second quarter results. Market sentiment also was encouraged by the promise of additional US fiscal stimulus, after the European Union forged a historic budget package intended to dampen the economic impact of the effects of the COVID-19 pandemic. The European Union reached an agreement on a 750 billion Euro coronavirus rescue fund after four days of intense negotiations among officials from the 27-nation bloc. On the economic data front, the Chicago Fed National Activity Index for June, a composite of 85 indicators, rose to a fresh record 4.11, marking a record high going back to 2000, from a 3.5 in May - representing a level that was raised from the previous May reading. A zero value for the index indicates the national economy is expanding at its historical trend rate of growth. The report highlights that some aspects of the economy are attempting to come off its coronavirus lows.

 

Magnifying their previous session's gains, crude oil futures ended higher on Tuesday as worries about the energy demand outlook faded after European Union leaders agreed on a stimulus package to help revive euro area economy. EU leaders conceded the package worth 750 billion euro. Accordingly, the bloc will issue debt jointly which would be provided to member nations hit hardest by the Covid-19. Out of the 750 billion euro recovery plan, 390 billion euro will be in the form of grants and 360 billion euro of low interest rate loans. Further, recent positive coronavirus vaccine results from Pfizer, AstraZeneca and BioNTech had boosted hopes that the virus can be contained and that the global economy will soon be back in recovery mode. Crude oil futures for August rose $1.15 or 2.8 percent to settle at $41.96 a barrel on the New York Mercantile Exchange. September Brent crude gained $1.04 or 2.4 percent to settle at $44.32 a barrel on London's Intercontinental Exchange.

 

Rising for third straight session, Indian rupee strengthened substantially against dollar on Tuesday, owing to dollar sale by exporters and banks. Sentiments remained positive from trials of three potential Covid-19 vaccines, including a closely-watched candidate from Oxford University, increased confidence that a vaccine can train the immune system to recognize and fight the novel coronavirus without serious side effects. However, there was some cautiousness with External Affairs Minister S Jaishankar's statement that the free trade agreements (FTAs) that India entered into over the years have not been able to largely serve the country's economy well in terms of building its capacities, though all such pacts are not the same. On the global front, euro hit its strongest level since early March on Tuesday after the European Union (EU) struck a deal for a massive stimulus plan to revive their coronavirus-hit economies. Finally, the rupee ended at 74.74, 17 paise stronger from its previous close of 74.91 on Monday.

 

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 4950.01 crore against gross selling of Rs 3302.22 crore, while in the debt segment, the gross purchase was of Rs 764.17 crore with gross sales of Rs 396.16 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.75 crore against gross selling of Rs 4.94 crore.

 

The US markets ended mostly higher on Tuesday, paring earlier gains, after Senate Majority Leader Mitch McConnell said he didn't expect Congress to pass another stimulus bill in the next two weeks. Asian markets are trading mostly in green on Wednesday after US President Donald Trump's comments regarding the country's surge in novel coronavirus cases outweighed a slight rally on Wall Street. Indian markets ended higher for a fifth straight session on Tuesday, led by financials, auto and energy stocks. Today, the markets are likely to get flat-to-positive start amid supportive global cues. Traders will be getting encouragement as asserting that green shoots are visible, Finance Minister Nirmala Sitharaman has assured the industry that the government is open to taking more actions in future to boost economic recovery. Some support will also come with Union minister for road transport and highways Nitin Gadkari's statement that the current economic crisis being faced by India is a temporary phase and the country still remains the fastest growing economy in the world, and a favourable investment destination. Traders may take note of a private report that easing of lockdown restrictions, seems to have a positive impact on the job landscape across sectors and geographies as employment sentiment has picked by 7 per cent from the 86 per cent drop it witnessed during the lockdown. Besides, Commerce and Industry Minister Piyush Goyal said after concluding a quick trade deal, India and the US need to sit down on the negotiating table for working towards a more sustainable, robust and enduring partnership in the form of a free trade agreement (FTA). However, there may be some cautiousness with rising coronavirus cases in the country. India has recorded more than 39,000 coronavirus cases in the past 24 hours, taking its total to 1,194,085. The country's death toll has now risen to 28,770. Traders may also be concerned with private report that economic activity continues to remain weak and will lead to a 6.1 percent contraction in India's GDP in the current fiscal. There will be some buzz in MSMEs stocks as the finance ministry said banks have sanctioned loans worth about Rs 1,27,582 crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector impacted by the economic slowdown triggered by COVID-19. Construction stocks will be in focus with ICRA's report that the domestic mining and construction equipment (MCE) sector is likely to see a volume decline of over 20 percent in calendar year (CY) 2020 on account of loss of sales in April and May, and an overall weakness in the economy. There will be some earnings reaction based on the performance of the companies.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,162.25

11,123.82

11,190.12

BSE Sensex

37,930.33

37,784.74

38,033.24

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

 

Support  (Rs)

 

Resistance (Rs)

 

(in Lacs)

Indian Oil Corporation

939.05

93.45

89.20

96.20

Tata Motors

660.09

108.45

106.07

110.27

State Bank of India

592.86

194.40

191.87

196.57

Bharat Petroleum Corporation

491.45

464.20

439.40

485.00

ICICI Bank

455.60

378.80

372.60

382.45

 

  • NTPC has added the 800 MW Unit-2 of Lara Super Thermal Power Project to installed capacity of the company on successful completion of trial operation. 
  • Wipro has entered into a partnership with ComplianceQuest to develop transformative quality management solutions for the medical devices and life sciences industries. 
  • Britannia Industries is planning to invest over Rs 700 crore to open five new manufacturing units in the next two-and-a-half years to meet the growing demand in different parts of India. 
  • Reliance Industries' telecom arm -- Jio has sought spectrum in certain frequencies from the Department of Telecom for holding trials of the latest 5G technology.
News Analysis