Indian equity benchmarks traded
with negative bias throughout the day and settled Monday's session with losses
of over half percent, on the back of sustained selling activities by
market-participants. Markets made gap-down opening, as traders remained concern
with S&P Global Ratings stating that the Indian economy is in deep trouble
with growth expected to contract by 5 percent in this year. It added that
difficulties in containing the virus, an anemic policy response, and underlying
vulnerabilities, especially across the financial sector, are leading us to
expect growth to fall this year before rebounding in 2021. The street remained
disappointed with private report stating that extended period of the lockdown and
increase in COVID-19 positive cases will have a strong impact on the economic
growth, while supply chain disruption is expected to keep food prices at
elevated levels. Key gauges continued their weak trade during afternoon deals,
as India's foreign exchange reserves retreated from a life-time high to touch
$505.566 billion in the week ended June 19, down by $2.078 billion from the
previous week. Further, geopolitical tensions like India-China border issue and
US-China trade tiff kept participants on edge. However, markets managed to pare
most of their losses in late trade, taking support from Commerce and Industry
Minister Piyush Goyal's statement that adoption of technology and the digital
economy would play a vital role in transforming business enterprises in the
future and achieving the target of $5 trillion economy. Some support also came
with the India Meteorological Department's statement that the Southwest Monsoon
has covered the entire country nearly two weeks ahead of its schedule. Finally,
the BSE Sensex lost 209.75 points or 0.60% to 34,961.52, while the CNX Nifty
was down by 70.60 points or 0.68% to 10,312.40.
The US markets settled higher on
Monday, as upbeat economic data raised hopes, and also as Boeing shares surged.
Markets scored an early boost after a report showed that pending home sales in
May spiked 44.3% compared with April, according to the National Association of
Realtors. That beat expectations of a 15% rise. Sales were still 5.1% lower
compared against the same time last year. Besides, sentiments got boost after
Boeing (BA) shares soared more than 14% after the company got permission to
test flights using the 737 Max. The Federal Aviation Authority has been
reviewing the safety fixes done on the aircraft. The Boeing 737 Max flights
were grounded worldwide on safety concerns and deliveries were suspended after
two fatal accidents that killed 346 people. It is expected that the airworthiness
would be revoked on satisfactory test flights. Markets rose despite several
states in the US reporting sharp spikes in new coronavirus cases over the
weekend. A dozen states, including Florida, Texas, California and Arizona - now
hot spots in the US - reversed reopening plans and implemented tighter
restrictions to prevent a further spread of the viral epidemic. Meanwhile, New
York Gov. Andrew Cuomo said he may slow New York City's broader Phase III
reopening slated for next Monday, which would allow indoor dining at
restaurants and more personal-care services and outdoor activities to resume.
An inability to curtail the spread of COVID-19 would prove problematic for
economic projections that factor in a sharp, V-shaped rebound, if business
activity stalls or more closures are ordered to address the public health
crisis.
Crude oil futures ended higher on
Monday buoyed by some recovery in energy demand. Better than expected economic
data from China pushed up oil prices. According to data released by China's
national bureau of statistics, profits at China's industrial firms in May rose
6% year-on-year to 582.3 billion yuan ($82.28 billion), rising for the first
time in six months. The rise suggests the country's economic recovery is
gaining traction and brightening the outlook for manufacturing investment and
jobs. However, Fears of a second wave of the virus pandemic have raised the
possibility of another lockdown. The US is the worst-hit country with over 2.5
million infections, while its death toll exceeds 125,500. New outbreaks are
reported in countries including China, New Zealand and Australia. Crude oil
futures for August rose $1.21 or 3.1 percent to settle at $39.70 a barrel on
the New York Mercantile Exchange. August Brent crude added 69 cents or 1.7
percent to settle at $41.71 a barrel on London's Intercontinental Exchange.
Indian rupee ended higher against
dollar on Monday, owing to dollar sale by exporters and banks. Besides, the
dollar losing muscle against other currencies overseas too helped the domestic
currency. However, gain remain capped as S&P Global Ratings said Indian
economy is in deep trouble with growth expected to contract by 5 percent in
this year before rebounding in 2021 on account of difficulties in containing
the virus, an anemic policy response, and underlying vulnerabilities,
especially across the financial sector. On the global front; dollar struggled to
make headway on Monday, and riskier currencies inched ahead, as investor
sentiment swung between hopes for a global economic recovery and fears that a
fresh wave of coronavirus cases could undermine the revival. Finally, the rupee
ended at 75.58, 7 paise stronger from its previous close of 75.65 on Friday.
The FIIs as per Monday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 4749.26 crore against gross
selling of Rs 5707.12 crore, while in the debt segment, the gross purchase was
of Rs 1550.02 crore with gross sales of Rs 1346.64 crore. Besides, in the
hybrid segment, the gross buying was of Rs 43.24 crore against gross selling of
Rs 47.32 crore.
The US markets ended higher on
Monday as the sentiment boost from upbeat US housing data outweighed the threat
of rising Covid-19 infections. All the Asian markets are trading in green on
Tuesday after data showed China's manufacturing sector grew more than expected
in June, a hopeful sign for a global economy still struggling to recover from
the sweeping impact of the coronavirus crisis. Indian markets ended notably
lower on Monday as mounting coronavirus cases both at home and abroad kept
investors on edge. Today, the start of the session is likely to be optimistic
tracking firm global cues. The announcement of Unlock 2 - phase of the
reopening of the economy might aid the positive sentiment. Investors will be
looking ahead to the Prime Minister Narendra Modi's address at 4 PM today in
which he is expected to speak on the Unlock 2 - phase as well as the government's
decision to ban 59 Chinese mobile apps amid border tensions with China. Traders
will be taking encouragement with Union minister Mahendra Nath Pandey's
statement that the government has approved the third phase of skill development
scheme, Pradhan Mantri Kaushal Vikas Yojana (PMKVY), with an increased focus on
digital technology and industry 4.0. Some support will also come as the Reserve
Bank of India (RBI) will be conducting a buy and sell open market operations
(OMO) in bonds worth Rs 10,000 crore. Though, traders may be some cautiousness
as India recorded over 18,000 Covid-19 cases in the last 24 hours, taking its
total count to 567,536. Around 16,900 people have succumbed to the disease.
Traders may be concerned with India Ratings and Research's report that the
gross state domestic product (GSDP) of all states is likely to contract up to
14.3 per cent in the current financial year due to the impact of
Covid-19-induced lockdown on economic activities. There will be some buzz in
the metal stocks as Union Steel Minister Dharmendra Pradhan said that the
country has avoided steel imports worth over Rs 20,000 crore following DMISP
policy since its launch in 2017. Auto stocks will be in focus with private
report that India is drawing up an incentive scheme for the autos sector aimed
at doubling exports of vehicles and components in the next five years. There
will be some reaction in telecom stocks after the Trai released mobile
subscriber data for the month of February.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,312.40
|
10,244.68
|
10,359.03
|
BSE Sensex
|
34,961.52
|
34,738.27
|
35,108.57
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ITC
|
915.05
|
197.25
|
194.63
|
201.43
|
State Bank of India
|
509.67
|
179.25
|
177.47
|
182.07
|
Tata Motors
|
432.75
|
99.45
|
97.87
|
101.22
|
Axis Bank
|
363.20
|
404.80
|
399.50
|
412.95
|
ICICI Bank
|
273.85
|
343.10
|
339.20
|
346.30
|
Dr Reddy's Laboratories is expecting to launch 25 products in the US market in the current financial year.
SBI is working on setting up an e-commerce portal for marketing of products manufactured by MSMEs in the country.
Cipla and Boehringer Ingelheim India have entered into a partnership in India to co-market three new oral anti-diabetics drugs.
Coal India has identified 14 additional projects involving capital expenditure of more than Rs 3,400 crore under the first mile connectivity initiative to upgrade transport facility at mines.