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NSE Intra-day chart (04 August 2020)
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Market Commentary 05 August 2020
Benchmarks likely to open in green on positive global cues


Tuesday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered splendid gains, led by massive buying in index majors Reliance Industries and HDFC Bank amid heavy foreign fund inflows and a positive trend in global equities. The market indices snapped a four-session losing run, with Sensex and Nifty closing just shy of their crucial 37,700 and 11,100 levels, respectively. The benchmarks opened higher and gradually built on the rally to close near the day's highs, as traders took encouragement with CARE Ratings' report that banks have sanctioned around 44 percent of the targeted amount of liquidity support to micro, small and medium enterprises (MSMEs) under the government's Emergency Credit Line Guarantee Scheme (ECLGS). Besides, in order to mitigate stress, State Bank of India's (SBI's) economists in its report has pitched for a sector-specific loan restructuring package after the end of the six-month loan repayment moratorium on August 31. Sentiments remained upbeat during late afternoon session, with Commerce and Industry Minister Piyush Goyal's statement that showing signs of significant improvement, the country's exports in July have reached almost the level of the corresponding month last year. He said several indicators are reflecting that the economic activities are reviving in the country. He added that that the country today is in a mood to not only bring back economic activity but also become self-reliant, improve the quality and competitive pricing of products. Market participants shrugged off the Asian Development Bank's (ADB) statement that global remittances will fall by 108.6 billion dollars if the Covid-19 economic impact persists throughout the year. This is equivalent to 18.3 per cent decline from what would have been expected without the impact of Covid-19. Finally, the BSE Sensex gained 748.31 points or 2.03% to 37,687.91, while the CNX Nifty was up by 203.65 points or 1.87% to 11,095.25.


The US markets ended higher after a choppy trading session Tuesday, with investors keeping one eye on stimulus talks in Washington and another on mixed corporate earnings. Senate Majority Leader Mitch McConnell, R-Ken said that he is prepared to support a coronavirus relief bill agreement between Democrats and the White House even is he has some problems with certain parts of it. However, uncertainty about a new stimulus contributed to the choppy trading seen for much of the day, as negotiators have thus far struggled to reach an agreement. Democrats and Trump administration officials said they made progress towards a deal during a meeting on Monday, but House Speaker Nancy Pelosi, D-Calif., noted the two sides still have our differences. On the economic data front, a report released by the Commerce Department showed another substantial increase in new orders for US manufactured goods in the month of June. The Commerce Department said factory orders soared by 6.2 percent in June after skyrocketing by a revised 7.7 percent in May. Street had expected factory orders to jump by 5.0 percent compared to the 8.0 percent spike originally reported for the previous month. The bigger than expected increase in factory orders came as orders for durable goods surged up by 7.6 percent in June after soaring by 15.0 percent in May. Orders for transportation equipment led the increase in durable goods orders once again, skyrocketing by 20.2 percent in June.


Crude oil futures reversed early losses, ending higher Tuesday with traders picking up positions ahead of inventory data on hopes of a drop in stockpiles. However, oil prices dropped to a low of $40.14 a barrel early on in the session, weighed down by concerns about spikes in coronavirus cases in several countries and reports that many have decided to extend lockdown measures. The overall number of global coronavirus cases has topped 18.1 million, while the deaths have increased to over 691,000. Meanwhile, as countries race to find a vaccine for Covid-19, the World Health Organization warned that there might never be a silver bullet for the coronavirus. Crude oil futures for September rose 69 cents or 1.7 percent to settle at $41.70 a barrel on the New York Mercantile Exchange. October Brent crude gained 28 cents or 0.6 percent to settle at $44.43 a barrel on London's Intercontinental Exchange.


Tumbling for second straight session; Indian rupee ended tad lower against dollar on Tuesday, on account of dollar demand from importers and banks. Traders remained cautious ahead of the Reserve Bank of India's three-day monetary policy meeting that gets underway today. Sentiments were pessimistic as Asian Development Bank (ADB) stated that global remittances will fall by 108.6 billion dollars if the Covid-19 economic impact persists throughout the year. This is equivalent to 18.3 per cent decline from what would have been expected without the impact of Covid-19. However, strong gains in domestic equity markets provided some support to the rupee, keeping the downside in check. On the global front, dollar faltered on Tuesday as political wrangling over a US relief plan and the gloomy economic outlook kept investors shy of the currency. Finally, the rupee ended at 75.04, 3 paise weaker from its previous close of 75.01 on Monday.


The FIIs as per Tuesday's data were net buyers in equity, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 13432.48 crore against gross selling of Rs 5908.35 crore, while in the debt segment, the gross purchase was of Rs 35.00 crore with gross sales of Rs 242.99 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.35 crore against gross selling of Rs 2.96 crore.


The US markets ended higher after a choppy session on Tuesday, lifted by Apple and energy stocks but limited by declines in AIG and Microsoft while investors awaited more U.S. government stimulus to fight economic fallout from the COVID-19 pandemic. Asian markets are trading mostly in green ahead of private survey of China's services sector in July, with the Caixin/Markit Services Purchasing Manager's Index will be in focus. Indian equity markets traded superbly to end with a massive gain on Tuesday supported by buying in heavyweights. Today, the start of session is likely to be positive on firm global cues. Traders will be taking encouragement. With the Department of Economic Affairs in its monthly macroeconomic report stating the worst may now be over for India and the road ahead will take the economy back on the track.  It added that Indicators such as Index of Industrial Production (IIP), Purchasing Managers Index (PMI), power generation, production of steel and cement, railway freight, traffic at major ports, air cargo and passenger traffic, e-way bill generation capturing the inter-state movement of goods, consumption of petroleum products, and motor vehicle registration, have shown improvements. However, traders may remain concern on ICRA's report where it mentioned that the securitisation volumes are estimated to significantly drop to Rs 1.2-1.3 lakh crore during the current fiscal due to the impact of COVID-19 and lower availability of eligible loan pools for securitisation. The securitisation volumes in 2019-20 were around Rs 1.97 lakh crore. Meanwhile, markets regulator SEBI has decided to decentralise work related to registration of portfolio managers. It has been decided that the processing of registration applications for portfolio managers received on or after Wednesday (August 5) will be decentralised and delegated to the respective regional offices or head office in Mumbai, based on the registered address of the applicant. Moreover, manufacturers looking to set up industrial projects in India have reportedly raised concerns regarding long approval wait times and multiple clearance requirements with officials from the Department of Promotion of Industry and Internal Trade (DPIIT).

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



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  • IOC has issued 16250, 5.40% Unsecured, Listed, Rated, Taxable, Redeemable, NCDs of Rs 10,00,000 each aggregating to Rs 1625 crore on Private Placement basis.
  • Asian Paints' manufacturing facilities are working at up to 70 per cent capacities due to the impact of COVID-19 pandemic and resultant lockdowns.
  • Sun Pharmaceutical Industries has launched FluGuard at an economical price of Rs 35 per tablet, for the treatment of mild to moderate cases of Covid-19 in India.
  • Tech Mahindra has started a coronavirus screening service Mhealthy, which can also detect COVID-19 antibodies.
News Analysis