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NSE Intra-day chart (08 April 2020)
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Market Commentary 09 April 2020
Benchmarks to open in green following global markets

 

In a volatile trading session, Indian equity benchmarks traded with a positive bias for most part of the day but selling activity which took place during late hour of trade mainly forced the markets to cut all of their gains and ended Wednesday's session in red terrain amid weakness in global equities. Key indices started off with marginal losses, as traders remained on sidelines as the central government mulls over lockdown extension beyond April 14 amid the spread of coronavirus. The total number of confirmed Covid-19 cases in India stand at 4,789 as the country entered the fifteenth day of a 21-day countrywide lockdown to curb the spread of the deadly disease. Around 124 people have died due to the disease. But, markets rebounded from the opening losses and surged at day's high in late morning deals, as traders turned optimistic with Niti Aayog member Ramesh Chand's statement that the government has taken several measures to safeguard farmers from any adverse impact of the ongoing lockdown, and the farm sector is expected to report a growth of little more than 3 per cent in the just-ended financial year. Adding some relief, the Small Industries Development Bank of India (SIDBI) said it will provide emergency working capital of up to Rs 1 crore to small and medium enterprises against their confirmed government orders. Though, key indices failed to hold gains and slid lower in the last hour of trading, as ratings agency ICRA predicted that India's economy is likely to witness a sharp contraction of 4.5 per cent during Q4FY2020 and is expected to post a GDP growth of just 2 percent in FY2021. Finally, the BSE Sensex lost 173.25 points or 0.58% to 29,893.96, while the CNX Nifty was down by 43.45 points or 0.49% to 8,748.75.

 

The US markets ended higher on Wednesday as investors hoped for more Federal Reserve support and a potential sooner-than-expected rollback of containment measures put in place to fight the COVID-19 pandemic. The latest data from the Johns Hopkins University showed that the number of new cases in US has decreased in recent days after reaching a peak last Friday. The number of new coronavirus cases has also recently shown significant downturns in Italy and Spain, which currently have the most confirmed cases in Europe. The total death toll in the US from the pandemic rose sharply to more than 12,900. Confirmed infections in the US neared 400,000, more than double the number of any other nation. Cases globally rose to more than 1.4 million, while deaths exceeded 85,000. Adding to the positive sentiment, White House health advisor Dr. Anthony Fauci said the US could see the beginning of a turnaround after a bad week for deaths this week. Fauci noted deaths are a lagging indicator and pointed to the decrease in the number of new cases and a lower rate of hospitalizations. Meanwhile, Bernie Sanders also ended his race for the White House, removing market uncertainty around his campaign promises to rein in Wall Street and big corporations as president. 

 

Crude oil futures ended higher on Wednesday, rebounding from losses in previous session, buoyed by a weekly decline in US crude production. The Energy Information Administration (EIA) reported a weekly decline of 600,000 barrels a day in domestic crude production from a near record level to 12.4 million barrels a day for the week ended April 3. It also reported, however, that US crude supplies rose for an 11th straight week. Besides, oil prices also rose as oil producers are scheduled to hold a virtual meeting on Thursday, with private reports indicating Saudi Arabia and Russia were inching toward a deal to cut production and end a damaging price war that has flooded the world with crude supply and caused a storage shortage as major economies shut as governments tried to stop a fast-spreading COVID-19 pandemic. Crude oil futures for May rose $1.46 or 6.2 percent to settle at $25.09 a barrel on the New York Mercantile Exchange. June Brent crude gained 97 cents or 3 percent to settle at $32.84 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended sharply lower against the US dollar on Wednesday on increased demand for the American unit from importers. Traders remained on sidelines as the central government mulls over lockdown extension beyond April 14 amid the spread of coronavirus. Traders also remain worried as ratings agency ICRA predicted that India's economy is likely to witness a sharp contraction of 4.5 per cent during Q4FY2020 and is expected to post a GDP growth of just 2 percent in FY2021. Besides, a strong dollar in world markets along with volatility seen in the domestic equity market exerted pressure on the rupee. On the global front, dollar firmed on Wednesday as optimism that the coronavirus crisis was slowing waned, increasing investors' concern over the economic impact of the pandemic. Finally, the rupee ended at 76.34, 70 paise weaker from its previous close of 75.64 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 10364.27 crore against gross selling of Rs 9347.61 crore, while in the debt segment, the gross purchase was of Rs 190.83 crore with gross sales of Rs 1338.75 crore. Besides, in the hybrid segment, the gross buying was of Rs 17.74 crore against gross selling of Rs 16.70 crore.

 

The US markets ended higher on Wednesday after President Donald Trump said Americans might be getting to the top of the curve in relation to the outbreak. Asian markets are trading mostly in green on Thursday on hopes the Covid-19 pandemic is nearing a peak and that governments would roll out more stimulus measures. Indian markets ended lower on Wednesday in the wake of rising new coronavirus cases. Today, the start of session is likely to be positive following firm cues from global markets. Investors will be looking ahead to the Index of Industrial Production (IIP) data to be out later in the day. Traders will be getting encouragement with a private report stating that a second stimulus package India is poised to announce in coming days will be worth around Rs 1 lakh crore ($13 billion) and focus on help for small and medium businesses weathering the coronavirus outbreak. Some support will also come as the Ministry of Corporate Affairs issued a slew of measures to facilitate the functioning of companies as they grapple with the ongoing nationwide lockdown due to the coronavirus pandemic. Though, there may be some cautiousness with rising coronavirus cases. The number of coronavirus cases in the country reached 5,916, with 178 deaths. Traders may be concerned with the United Nations' International Labour Organization (ILO) in its latest report stating that about 400 million people working in the informal economy in India are at risk of falling deeper into poverty due to the coronavirus crisis which is having catastrophic consequences, and is expected to wipe out 195 million full-time jobs or 6.7% of working hours globally in the second quarter of this year. Traders may take note of report that India Inc has sought an economic package from the Centre to tide over the impact of the coronavirus outbreak and support small and medium businesses to keep their enterprises afloat while catering to the needs of the poor and informal sector workers. Aviation stocks will be on focus with a private report that private Indian airports are staring at a steep 40-60 per cent fall in passenger volume this financial year due to the Covid-19 crisis. 

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

8,748.75

8,557.87

9,035.67

BSE Sensex

29,893.96

29,255.28

30,880.31

                                                 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

 

Support  (Rs)

 

Resistance (Rs)

 

(in Lacs)

Tata Motors

821.82

67.60

64.80

71.00

State Bank of India

804.37

183.00

177.50

191.45

ICICI Bank

739.32

318.95

305.12

342.77

Axis Bank

649.31

391.35

367.33

421.53

Indusind Bank

560.94

399.15

360.30

439.70

 

  • Larsen & Toubro's wholly owned subsidiary -- L&T Hydrocarbon Engineering has been awarded a Large Project by Indian Oil Corporation. 
  • JSW Steel reported 3.97 million tons crude steel production for Q4FY20. 
  • Hero MotoCorp has extended the duration of all its warranty and free services in view of the nationwide COVID-19 lockdown. 
  • Maruti Suzuki India has reported 32 percent fall in its production in March 2020.  
News Analysis