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NSE Intra-day chart (04 September 2020)
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Market Commentary 07 September 2020
Benchmarks to make negative start amid weakness in global peers


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.


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  • Infosys has signed a definitive agreement to acquire Kaleidoscope Innovation. 
  • M&M has signed a share purchase agreement for purchase of additional stake of Carnot Technologies. 
  • L&T's defence arm has been awarded a significant contract by the Indian MoD for the supply of four Regiments of Pinaka Weapon Systems. 
  • Tata Motors has launched the new XT+ variant of its flagship SUV - Harrier.
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