Indian equity benchmarks have
showcased a strong performance on Wednesday, by gaining over a percent in the
session and settling above the psychological 10,400 (Nifty) and 35,400 (Sensex)
levels. After making a cautious start, markets gained traction and traded in
fine fettle, as the data released by the Reserve Bank of India (RBI) showed
that India's current account balance recorded a marginal surplus in the
January-March quarter of FY20. Traders also took note of the Reserve Bank of
India's data showing that direct investment into the country rose by $19
billion during 2019-20. Sentiments remained optimistic with Union Minister
Nitin Gadkari's statement that the government is looking at ways to boost
India's exports. He is also hopeful that a solution will be found in the next
4-6 months to address the issue of delay in payment to micro, small and medium
enterprises. Benchmark indices gained more strength in late afternoon session,
as investors' morale remained upbeat with Niti Aayog Vice Chairman Rajiv
Kumar's statement that India's economy will recover following the containment
of COVID-19 pandemic, and ongoing reforms would keep the country's growth rate
ahead of peers. The market participants overlooked weak economic data. The
growth of eight core infrastructure industries has contracted by 23.4 percent
in May 2020 as compared to same period of last year, due to the
coronavirus-induced lockdown. Traders
also paid no heed towards Fitch Ratings in its June update of Global Economic
Outlook lowered India's growth forecast for financial year 2021-22 to 8 percent
from 9.5 percent projected last month. However, the rating agency retained its
projection of Indian economy contracting by 5 percent in the current fiscal
(FY21). It projected Indian economy to
grow 5.5 percent in 2022-23. Finally, the BSE Sensex gained 498.65 points or
1.43% to 35,414.45, while the CNX Nifty was up by 127.95 points or 1.24% to
10,430.05.
The US markets ended mostly higher
on Wednesday, after drug giant Pfizer and German biotech company BioNTech
announced positive data from an early-stage human trial of a potential
coronavirus vaccine. The companies said the most advanced of four
investigational vaccine candidates was generally well tolerated and produced
neutralizing antibodies. Further, market participants parsed minutes from the
Fed's June 9-10 meeting, where the rate-setting Federal Open Market Committee
agreed to provide clarity in future communications about what would cause the
central bank to keep rates close to zero or move them higher. The committee
kept federal-funds rates at a range between 0% and 0.25% and signaled that it
might hold levels there until at least 2022. Adding to positive sentiment on
markets, the Institute for Supply Management (ISM) released a report showing US
manufacturing activity unexpectedly expanded in the month of June. The ISM said
its purchasing managers index jumped to 52.6 in June from 43.1 in May, with a
reading above 50 indicating an expansion in manufacturing activity. Street had
expected the index to climb to 49.5, which have still indicated a modest
contraction in manufacturing activity. A separate report released by payroll
processor ADP showed a significant increase in private sector employment in the
month of June as well as a substantial upward revision to the data for May. ADP
said private sector employment jumped by 2.369 million jobs in June, which was
below street estimates for a spike of about 3.000 million jobs. However,
revised data showed private sector employment soared by 3.065 million jobs in
May compared to the previously reported loss of 2.760 million jobs.
Crude oil futures ended higher on
Wednesday after a US government report showed the largest weekly decline in
domestic crude inventories so far this year. The Energy Information
Administration (EIA) reported that US crude inventories fell by 7.2 million
barrels for the week ended June 26. That followed three consecutive weeks of
increases. S&P Global Platts had forecast an average crude supply decline
of 2.7 million barrels, while the American Petroleum Institute reported a fall
of 8.2 million barrels. The EIA data also showed crude stocks at the Cushing,
Okla., storage hub edged down by about 200,000 barrels for the week. Crude oil
futures for August gained 55 cents or 1.4 percent to settle at $39.82 a barrel
on the New York Mercantile Exchange. September Brent crude rose 76 cents or 1.8
percent to settle at $42.03 a barrel on London's Intercontinental Exchange.
Indian rupee ended weaker against
dollar on Wednesday, on emergence of demand for the greenback from importers.
Investors' sentiment remained fragile as India's core sector growth contracts
by 23.4 percent in May 2020 as compared to same period of last year, due to the
coronavirus-induced lockdown. Besides, hit by sharp contractions in both output
and new orders, Indian manufacturing activity also remained sluggish in the
month of June. However, gains in domestic equity markets provided some support
to the rupee, keeping the downside in check. On the global front; currency
traders were broadly cautious on Wednesday, with the Japanese yen seeing its
first session of gains in more than a week, before key European and U.S.
economic data. Finally, the rupee ended at 75.60, 9 paise weaker from its
previous close of 75.51 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 4805.28 crore against gross selling of Rs 6748.07 crore, while
in the debt segment, the gross purchase was of Rs 911.92 crore with gross sales
of Rs 935.26 crore. Besides, in the hybrid segment, the gross buying was of Rs
9.95 crore against gross selling of Rs 12.08 crore.
The US markets ended mostly
higher on Wednesday after drug giant Pfizer and German biotech company BioNTech
announced positive data from an early-stage human trial of a potential
coronavirus vaccine. Asian markets are trading in green on Thursday following
positive news overnight around the development of a potential coronavirus
vaccine. Indian markets ended higher with significant gains on Wednesday, after
a survey showed the pace of contraction in India's manufacturing sector slowed
further in June. Today, the markets are likely to make positive start following
gains in Asian peers. Traders will be taking encouragement with Finance
minister Nirmala Sitharaman's statement that the government is committed to undertaking
reforms to make the tax administration simple for businesses, particularly the
micro, small and medium enterprises (MSMEs). Traders may take note that
traders' body CAIT suggested a host of measures, like technical audits and
waiver of late fees, to broaden the GST base and make the taxation system
simple. However, there may be some cautiousness with over 19,000 cases being
reported in the last 24 hours, India's total tally of coronavirus cases has
crossed the 600,000 mark. At present, the country has 605,220 cases, of which
17,840 are fatalities. Traders may also be concerned as the International
Labour Organisation (ILO) has warned that if another Covid-19 wave hits in the
second half of 2020, there would be global working-hour loss of 11.9 per cent -
equivalent to the loss of 340 million full-time jobs. Meanwhile, SEBI came out
with a set of standard operating procedures for stock exchanges, clearing
corporations and depositories to deal with possible defaults by trading or
clearing members. The framework, which will come into force from August 1, is
aimed at protecting the interest of non-defaulting clients of trading members
or clearing members in the likely event of default by trading member or
clearing member. There will be some buzz in the metal stocks as the government
assured steel makers that it will take appropriate measures to reduce the
logistics cost of products that currently reaches as high as 28 percent.
Banking stocks will be in focus with Fitch Ratings' report that Indian banks may
continue to face heightened asset quality and earning pressure for at least two
years, as disruption to business activity and supply chains and shrinking
personal incomes damage banks' balance sheets.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,430.05
|
10,337.42
|
10,484.87
|
BSE Sensex
|
35,414.45
|
35,072.02
|
35,612.05
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
540.16
|
184.80
|
180.47
|
187.27
|
Axis Bank
|
533.81
|
433.25
|
414.15
|
444.85
|
Tata Motors
|
508.68
|
100.75
|
98.82
|
102.07
|
ITC
|
442.98
|
202.90
|
197.08
|
206.28
|
ICICI Bank
|
369.23
|
364.05
|
355.18
|
369.33
|
Hero MotoCorp has commenced the dispatches of its eagerly-awaited new motorcycle - the Hero Xtreme 160R.
IOC, NTPC and South Delhi Municipal Corporation have signed a tripartite MoU for development of a facility to convert municipal waste into electricity.
Reliance Industries is planning to acquire retail businesses of Kishore Biyani's Future Group.
NTPC has declared commercial operation of Unit-2 of 150 MW of Kameng Hydro-Electric Project (4x150 MW) of North Eastern Electric Power Corporation.