Snapping their five-day winning
streak, Indian equity benchmarks ended Wednesday's choppy session marginally in
red amid selling in IT, Auto and Capital Goods stocks. Weak global markets
owing to US-China tensions and a surge in coronavirus cases too dented the
investor sentiment. Key indices made slightly positive start but soon turned
cautious with a private report stated that economic activity continues to
remain weak and will lead to a 6.1 percent contraction in India's GDP in the
current fiscal. However, key indices erased all morning losses and managed to
trade in green in afternoon session, as Finance Minister Nirmala Sitharaman has
assured the industry that the government is open to taking more actions in
future to boost economic recovery. She said that the Rs 20.97 lakh crore
stimulus package announced by the government to fight the economic impact of
COVID-19 pandemic was having a positive impact on the ground on various sectors
including on MSMEs. Some support also came with Union Minister Nitin Gadkari
terming India as the best destination for foreign investment with high returns
and urged investors including from the US to reap rich dividends by investing
in its infrastructure, MSMEs, banks, NBFCs and other areas. But, buying proved
short lived as markets fell once again in late afternoon session, as some
anxiety remained among traders, with External Affairs Minister S Jaishankar's
statement that India had to struggle mightily to gain influence in a domain
that could have come more easily earlier as its foreign policy carries 'three
major burdens' from its past -- Partition, delayed economic reforms and
prolonged exercise of the nuclear option. On the global front, Asian markets
ended mostly lower on Wednesday after U.S. President Donald Trump warned the
U.S. coronavirus crisis will probably worsen before improving. Besides, the
latest survey from Jibun Bank revealed that the manufacturing sector in Japan
continued to contract in July, albeit at a slightly slower pace, with a
manufacturing PMI score of 42.6, up from 40.1 in June. Individually, production
and new orders continued to fall at substantial rates, albeit slower than in
June. The rate of decline in employment accelerated further and was marked
overall. European markets were trading lower, as the initial euphoria over an
agreement on EU stimulus package faded and the focus shifted back to surging
coronavirus cases around the world. Brexit deal talks and rising U.S.-China
tensions also remain on investors' radar. Finally, the BSE Sensex fell 58.81
points or 0.16% to 37,871.52, while the CNX Nifty was down by 29.65 points or
0.27% to 11,132.60.
The US markets ended higher on
Wednesday as traders remain optimistic about the economic outlook despite the
recent surge in new coronavirus cases. Adding to the optimism, the National
Association of Realtors (NAR) released a report showing existing home sales
rebounded at a record pace in June after three straight months of declines. NAR
said existing home sales spiked by 20.7 percent to an annual rate of 4.72
million in June after plunging by 9.7 percent to a rate of 3.91 million in May.
Street had expected sales to skyrocket by about 24.5 percent. NAR's chief
economist Lawrence Yun said the sales recovery is strong, as buyers were eager
to purchase homes and properties that they had been eyeing during the shutdown.
He added this revitalization looks to be sustainable for many months ahead as
long as mortgage rates remain low and job gains continue. However, buying
interest was subdued as traders worried about rising tensions between the US
and China after the US asked Beijing to close its diplomatic consulate in
Houston within the next 72 hours. Chinese foreign ministry spokesperson Wang
Wenbin condemned the action and warned of retaliation if the U.S. does not
reverse its decision.
Crude oil futures ended
marginally lower on Wednesday pressured by an unexpected weekly climb in US
crude stockpiles. The Energy Information Administration reported that US crude
inventories rose by 4.9 million barrels for the week ended July 17. That
compared with an average forecast by S&P Global Platts for a decline of 1.9
million barrels. The American Petroleum Institute on Tuesday reported a climb
of 7.5 million barrels. Further, rising tensions between the US and China
raised the potential for a decline in energy demand. Crude oil futures for
September declined 2 cents or 0.05 percent to settle at $41.90 a barrel on the
New York Mercantile Exchange. September Brent crude lost 3 cents or 0.07
percent to settle at $44.29 a barrel on London's Intercontinental Exchange.
Indian rupee ended weaker against
the US dollar on Wednesday, on increased demand for the greenback from
importers and banks. Investors remain concerned with private report stating
that economic activity continues to remain weak and will lead to a 6.1 percent
contraction in India's GDP in the current fiscal. Besides, rising coronavirus
cases in the country also dampened the sentiments. 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. On the global front; dollar
nursed losses against most currencies on Wednesday, undermined by concern that
Republicans and Democrats are struggling to reach consensus on the next round
of U.S. economic stimulus measures. Finally, the rupee ended at 74.75, 1 paise
weaker from its previous close of 74.74 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 8031.92 crore against gross
selling of Rs 5941.71 crore, while in the debt segment, the gross purchase was
of Rs 212.85 crore with gross sales of Rs 2023.54 crore. Besides, in the hybrid
segment, the gross buying was of Rs 9.09 crore against gross selling of Rs
11.26 crore.
The US markets ended in green on
Wednesday as traders remain optimistic about the economic outlook despite the
recent surge in new coronavirus cases. Asian markets are trading mixed on
Thursday as investors weighed between fresh diplomatic tensions between the US
and China as well as the boost to Wall Street from US stimulus hopes. Indian
markets snapped five sessions of gains and ended lower with minor cuts on
Wednesday dragged by auto, IT and FMCG stocks. Today, the start of session is
likely to be cautious amid mixed Asian cues coupled with rising coronavirus
cases in the country. India witnessed a huge spike of over 45,000 in the count
of new coronavirus cases in the past 24 hours, taking its tally to 1,239,684.
Record 1,120 people succumbed to the fatal disease. With this, India's Covid-19
death toll rose to 29,890. Traders will be concerned as US Ambassador to India
Kenneth Juster has flagged concerns about India's policy environment and
micro-management of the economy. Juster said for India to become a part of the
global supply chain, first you need a stable & predictable regulatory
environment, a lighter touch on regulations and you need to unleash and not
micromanage economic growth. There will be some reaction as a private report
forecast deeper distress for the country which will lead to a 6 per cent growth
contraction in FY21, citing the yet to be stabilised infection curve and the
COVID-19 caseload in economically key states. However, some respite may come
later in the day as calling for more investment in India, Prime Minister
Narendra Modi said India is emerging as a land of opportunities. He added that
stronger domestic economic capacities can ensure global resilience against
external shocks. Some support may also come as pushing for a relaxation in
fiscal norms governing the finances of the states, NK Singh, chairman of the
15th Finance Commission, said states needed greater fiscal space to meet their
expenditure obligations. There will be some buzz in the pharma stocks as in a
bid to boost domestic manufacturing and reduce import dependence, the
department of pharmaceuticals notified two key policies -- Production Linked
Incentive (PLI) scheme for promotion of domestic manufacturing of critical Key
Starting Materials (KSMs)/ drug intermediates (DIs) and Active Pharmaceutical
Ingredients (APIs) and scheme for promotion of bulk drug parks. Telcom stocks
will be in focus with the Department of Telecom (DoT) order that telecom
operators will now have to provide the location grid of the premises of bulk
subscribers during physical verification for issuing new connections.
Meanwhile, Specialty chemical company Rossari Biotech will get listed at the
bourses today. The public issue, which consists of a fresh issue of Rs 50 crore
and an offer for sale of 1.05 crore shares by promoters, saw a massive
subscription of 79.37 times backed by QIB and non-institutional investors.
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
|
11,132.60
|
11,046.73
|
11,228.28
|
BSE Sensex
|
37,871.52
|
37,582.34
|
38,179.99
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Axis Bank
|
896.12
|
478.95
|
464.50
|
489.00
|
State Bank of India
|
622.77
|
192.00
|
189.15
|
195.80
|
Tata Motors
|
507.41
|
105.15
|
103.02
|
108.52
|
Vedanta
|
505.81
|
112.10
|
108.57
|
116.77
|
ICICI Bank
|
455.01
|
381.10
|
374.43
|
388.63
|
Adani Ports and Special Economic Zone has signed up for the Science Based Targets initiative.
Axis Bank has reported 12.83% fall in its consolidated net profit at Rs 1099.52 crore for Q1FY21 as against Rs 1261.40 crore for Q1FY20.
Bajaj Finserv has reported 43.75% rise in its consolidated net profit attributable to owners at Rs 1215.15 crore for Q1FY21 as against Rs 845.34 crore for Q1FY20.
HUL is expecting a couple of turbulent quarters going forward and the firm's objective would be to navigate it in the most agile manner.