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.