Indian equity benchmarks finished
lower for the second consecutive session on Friday, dragged by Metal, Financial
and Power stocks amid a sell-off in global equities. Markets made pessimistic
start and stayed in red terrain for whole day, as traders remained cautious
with domestic rating agency ICRA's report that corporate revenues declined by
31 per cent in the first quarter of current financial year (Q1FY21), but profit
margins decreased by a lesser degree to 3.6 per cent in the April-June period.
It analysed that financial results of 489 companies to arrive at the
conclusion. It can be noted that the GDP of the country contracted by 23.9 per
cent during the quarter, which had witnessed total lockdown of the country for
the first two months to contain the spread of the coronavirus infections. The
market participants failed to take support with Union Minister of Commerce and
Industry Piyush Goyal's statement that exports as well as imports are showing positive
trends. He said that the exports are approaching the last year's levels, after
making a sharp dip in April this year due to pandemic. Meanwhile, Finance
Minister Nirmala Sitharaman has asked banks and NBFCs to roll out loan
restructuring scheme for COVID-19 related stress by September 15 and provide
adequate support to the borrowers following the lifting of moratorium on
repayment of debts. Finally, the BSE Sensex fell 633.76 points or 1.63% to
38,357.18, while the CNX Nifty was down by 193.60 points or 1.68% to 11,333.85.
The US markets ended lower on
Friday even though stocks staged a significant recovery attempt over the course
of the trading day. Technology stocks contributed to the early sell-off on Wall
Street once again, as traders continued to cash in on the recent strength in
the sector. Selling pressure subsequently waned over the course of the session,
with shares of Apple (AAPL) showing a significant turnaround. Big-name tech
stocks like Microsoft (MSFT), Netflix (NFLX), and Amazon (AMZN) also climbed
well off their worst levels but still ended the day in the red. On the economic
front, the Labor Department released a report showing another substantial
increase in US employment in the month of August, although the pace of job
growth continued to slow from the record spike seen in June. The Labor
Department said non-farm payroll employment surged up by 1.371 million jobs in
August after spiking by a downwardly revised 1.734 million jobs in July and
soaring by 4.781 million jobs in June. Street had expected employment to jump
by about 1.400 million jobs compared to the addition of 1.763 million jobs
originally reported for the previous month. The strong job growth in August was
partly due to the hiring of 238,000 temporary 2020 Census workers, which
contributed to a significant increase in government employment.
Extending recent losses, crude
oil futures closed sharply lower on Friday, with the US benchmark ending below
$40 a barrel for the first time since early July, amid continued concerns about
the outlook for gasoline demand and easing of production cuts by leading oil
producers. According to a report from Baker Hughes, the total weekly active
drilling rig count increased by 2 to 256 this week. The weekly oil-rig count,
meanwhile, was up by 1 to 181 in the week. A slightly firmer US dollar on the
back of another increase in US employment, albeit at a slower pace, and a drop
in unemployment rate, also weighed on crude oil prices. Sharp reductions in
crude output by OPEC and allies since May pushed up crude oil prices for the
past several weeks. Crude oil futures for October lost $1.60 or 3.9 percent to
settle at $39.77 a barrel on the New York Mercantile Exchange. November Brent
crude declined $1.41 or 3.2 percent to settle at $42.66 a barrel on London's
Intercontinental Exchange.
Drubbing prevision session's
losses, Rupee bounced back on Friday on fresh selling of dollar by bankers and
exporters, even as domestic equity market was trading with significant losses.
Sentiments remained upbeat as Union Minister of Commerce and Industry Piyush
Goyal stated that exports as well as imports are showing positive trends. He
said that the exports are approaching the last year's levels, after making a
sharp dip in April this year due to pandemic. Besides, the Minister said that
the trade deficit is reducing drastically and share in the global trade is
improving. On the global front; pound erased some losses against the euro on
Friday, but held near recent lows versus the dollar as uncertainty around Brexit
weighed on the pound, which is expected to weaken further into the end of the
year. Finally, the rupee ended at 73.14, 33 paise stronger from its previous
close of 73.47 on Thursday.
The FIIs as per Friday'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 5062.25 crore against gross
selling of Rs 5181.13 crore, while in the debt segment, the gross purchase was
of Rs 1492.03 crore with gross sales of Rs 865.25 crore. Besides, in the hybrid
segment, the gross buying was of Rs 80.48 crore against gross selling of Rs
67.45 crore.
The US markets settled in red on
Friday with tech stocks taking the brunt of the pain for a second consecutive
day. Asian markets are trading mostly lower on Monday as tech tensions between
Washington and Beijing escalate. Indian markets ended sharply lower on Friday
after a selloff on Wall Street rippled across the Asian markets, with almost
all major sector indices trading lower. Today, the start of new week is likely
to be pessimistic amid weakness in global markets. There will be some
cautiousness as investors are likely to watch developments with respect to the
India-China border issue. Rising coronavirus cases in the country may also
dampen the sentiments in the markets. India, which is the worst-hit nation
after the US, recorded its highest single-day spike of 91,723 coronavirus cases
on Monday. The total number of coronavirus cases in the country now stand at
4,202,562. Traders may take note of Industry body FICCI's statement that the
recent rise in smuggling in the northeastern region can be attributed to
economic distress insinuated by Covid-19 pandemic. However, some respite may
come later in the day with the finance ministry's statement that the country is
witnessing a V-shaped economic recovery. Besides, Finance Minister Nirmala
Sitharaman said India's commitment to reform is being taken seriously by
foreign investors, which is evident from the good inflow of FDI even during the
time of COVID-19. Between April-July, the Foreign Direct Investment (FDI) into
India stood at $20 billion. Some support may come as the Reserve Bank came up
with revised long format audit report (LFAR) norms with a view to improving
efficacy of internal audit and risk management systems. Also, Commerce and
Industry Minister Piyush Goyal has said the country's exports as well as
imports are showing positive trends as the outbound shipments are approaching
the last year's levels, after making a sharp dip in April this year due to the
Covid-19 pandemic. Auto stocks will be in focus with the Society of Indian
Automobile Manufacturers (SIAM) report that the commercial vehicle industry,
which is facing challenging times, is expected to take at least 1-2 years to
get back to the 2018-19 sales volume level when the industry crossed the one
million sales mark. Select banking stocks will be in limelight as ratings
agency Moody's took rating action on five public sector banks, namely, Bank of
Baroda, Bank of India, Canara Bank, Punjab National Bank and Union Bank of
India. Meanwhile, the IPO of Happiest Minds Technologies to open for
subscription on September 07 and closes on September 09. The price band of the
offer has been fixed at Rs 165 to Rs 166 per equity share.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,333.85
|
11,274.31
|
11,422.71
|
BSE Sensex
|
38,357.18
|
38,161.42
|
38,641.31
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
955.65
|
147.80
|
145.31
|
151.96
|
Bharti Infratel
|
691.39
|
214.85
|
204.64
|
227.94
|
State Bank of India
|
544.36
|
206.60
|
204.24
|
210.64
|
Zee Entertainment
Enterprises
|
489.64
|
220.40
|
212.74
|
225.94
|
ITC
|
413.89
|
186.70
|
184.94
|
189.24
|
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