In choppy session, Indian equity
benchmarks declined for second straight session on Thursday, dragged down by
weakness in heavyweights like Larsen & Toubro, Titan Company, ONGC and Axis
Bank as future and derivative contracts for October expired. The benchmarks
opened lower and extended losses in afternoon trading, as sentiments were
dampened with report that India has reported a daily jump of nearly 50,000
Covid-19 cases, even as the tally has soared past the 8-million mark. The
country's death toll has mounted to 120,563. Market participants also took a
note of Chief Economic Adviser K V Subramanian's statement that non-banking
financial companies (NBFCs) need to follow prudential measures to ensure that
risks do not mount and be vigilant about the quality of lending in these
difficult times. The losses, however, were modest as compared to their other
global peers, as traders found some support with domestic credit rating agency
Crisil's report that financial conditions in India have staged a speedy
recovery from the harrowing abyss they had been sent flailing into by the
coronavirus disease (covid-19) pandemic in April, 2020. It said the Reserve
Bank of India's (RBI) measures have helped mitigate the large and broad-based
economic damage caused by the pandemic. Adding optimism, Union Finance Minister
Nirmala Sitharaman stated that she was closely monitoring the progress of Micro
Small Medium Enterprises (MSMEs), whom she called as the growth engine of the
country. Meanwhile, the Commerce and Industry Ministry has released the next
edition of its consolidated foreign direct investment (FDI) policy document,
incorporating all the changes made over the past year. Finally, the BSE Sensex
fell 172.61 points or 0.43% to 39,749.85, while the CNX Nifty was down by 58.80
points or 0.50% to 11,670.80.
The US markets ended higher on
Thursday following the release of a report from the Commerce Department showing
a stronger than expected rebound by the US economy in the third quarter. The
Commerce Department said real gross domestic product skyrocketed by 33.1
percent in the third quarter after plunging by 31.4 percent in the second
quarter. Street had expected GDP to soar by 31.0 percent. The substantial rebound
in GDP came as consumer spending bounced back sharply, spiking by 40.7 percent
in the third quarter after plummeting by 33.2 percent in the second quarter. Adding
to the positive sentiment, the Labor Department released a report showing
initial jobless claims fell to their lowest level since before the
coronavirus-induced lockdowns in the week ended October 24th. The report said
initial jobless claims dropped to 751,000, a decrease of 40,000 from the
previous week's revised level of 791,000. Street had expected jobless claims to
dip to 775,000 from the 787,000 originally reported for the previous week. With
the bigger than expected decrease, jobless claims fell to their lowest level
since hitting 282,000 in the week ended March 14th.
Magnifying their previous
session's losses, crude oil futures ended lower on Thursday, as rising COVID-19
cases sparked tighter restrictions on activity in Europe and underlined worries
about the outlook for the US and global economic recovery. France and Germany
imposed tighter restrictions in response to the rising number of COVID-19
cases. The US reported 79,000 new cases on Wednesday, the second day in a row
that the figure topped 70,000, as several states reported a jump in infections.
Meanwhile, the US Energy Information Administration reported that domestic
supplies of natural gas rose by 29 billion cubic feet for the week ended
October 23. Crude oil futures for December fell $1.22 or 3.3 percent to settle
at $36.17 a barrel on the New York Mercantile Exchange. December Brent crude
dropped $1.47 or 3.8 percent to settle at $37.65 a barrel on London's
Intercontinental Exchange.
Indian rupee concluded
substantially weaker against dollar on account of continued dollar demand from
importers and banks. Sentiments remained fragile despite private report that US
called for stronger energy ties with India, hinting at the possibility of
reducing trade and investment barriers between both the countries. Losses in
the local equity market combined with disappointing quarterly earnings by some blue-
chip companies also dampened sentiments. Meanwhile, Union Finance Minister
Nirmala Sitharaman stated that she was closely monitoring the progress of Micro
Small Medium Enterprises (MSMEs), whom she called as the growth engine of the
country. On the global front, dollar held gains against a basket of major
currencies on Thursday as escalating coronavirus cases in Europe stoked
investors fears that fresh lockdowns would further hit the already fragile
economic recovery. Finally, the rupee ended at 74.10, 23 paise weaker from its
previous close of 73.87 on Wednesday.
The FIIs as per Thursday's data
were net seller in both equity and debt segment. In equity segment, the gross
buying was of Rs 7621.27 crore against gross selling of Rs 8493.38 crore, while
in the debt segment, the gross purchase was of Rs 370.62 crore with gross sales
of Rs 1010.95 crore. Besides, in the hybrid segment, the gross buying was of Rs
14.59 crore against gross selling of Rs 18.37 crore.
The US markets closed higher on
Thursday even though big tech companies like Apple, Amazon, Alphabet, and
Facebook could not cheer Wall Street. Asian markets are trading in red on
Friday as jitters over upcoming US presidential elections and fears that the
global economic downturn will persist enveloped markets. Indian markets settled
lower on Thursday as except IT and energy, all other sectoral indices ended lower
led by FMCG, pharma, metal, and auto. Today, the start of session is likely to
be pessimistic following two consecutive day's losses amid weakness in Asian
peers. Traders will be concerned as the government data showed that contracting
for the seventh consecutive month, the output of eight core infrastructure
sectors dropped by 0.8 percent in September, mainly due to decline in
production of crude oil, natural gas, refinery products and cement. The
production of eight core sectors had contracted 5.1 percent in September 2019.
There will be some cautiousness as the government's fiscal deficit rose to Rs
9.14 lakh crore, about 114.8 percent of the annual budget estimate, during the
first six months of the current financial year, mainly on account of poor revenue
realisation. The revenue realisation during the current fiscal suffered on
account of the lockdown imposed by the government to check the spread of
coronavirus pandemic. Besides, the World Bank said remittances to India would
fall this year by nine percent to $76 billion due to the ongoing coronavirus
pandemic and global economic recession. Meanwhile, according to Worldometer,
coronavirus cases in India jumped to 8,088,046 with the addition of 49,281 new
infections on Friday as the death toll peaked to 121,131. However, some support may come later in the day with
report that the Reserve Bank of India will conduct the second Open Market
Operations (OMOs) purchase of State Developments Loans (SDLs), aggregating Rs 10,000
crore, on November 5, 2020. Traders may take note of report that Reserve Bank
of India (RBI) Governor Shaktikanta Das has underlined the need for
strengthening the preventive vigilance framework to increase efficiency,
stressing that it was also critical for ensuring good governance. Gold related
stocks will be in focus as the World Gold Council (WGC) said gold demand of
India is likely to recover in the fourth quarter (Q4) after falling 30% in the
previous quarter as festivals are expected to strengthen retail jewellery
purchases. There will be some important earnings announcements too to keep the
markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
11,670.80
|
11,603.45
|
11,741.15
|
BSE
Sensex
|
39,749.85
|
39,512.45
|
39,999.03
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
Tata
Motors
|
666.34
|
131.90
|
130.26
|
133.26
|
Axis
Bank
|
509.35
|
493.85
|
483.35
|
510.35
|
State
Bank of India
|
448.23
|
188.70
|
186.16
|
190.96
|
NTPC
|
419.16
|
86.50
|
85.50
|
88.00
|
ICICI
Bank
|
326.16
|
399.90
|
392.06
|
405.31
|
L&T's construction arm -- L&T construction has secured a mega order for its Heavy Civil Infrastructure business in India from the NHRCL.
Cipla has launched antibody detection kits for COVID-19 in India under the brand name ELIFast in partnership with KARWA, under the technology transfer from the ICMR.
Infosys has completed the acquisition of Blue Acorn iCi, an Adobe Platinum partner in the US, and a leader in digital customer experience, commerce and analytics.
Wipro has signed a definitive agreement to acquire Encore Theme Technologies, a specialist in providing SaaS and Cloud solutions in financial services.