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NSE Intra-day chart (06 October 2020)
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Market Commentary 07 October 2020
Benchmarks to get flat-to-positive start amid mixed Asian cues


Extending winning run to fourth day, Indian equity benchmarks clocked significant gains on Tuesday, propped up by Finance, Realty and Banking stocks amid positive global cues. Indian markets made gap-up opening and continued positive momentum for whole day, as traders took encouragement with Commerce Minister Piyush Goyal's statement Indian exports will automatically increase if the products are good and competitively priced and that products are entrepreneurs should not think that subsidies are the only solution. Some solace also came with IT Minister Ravi Shankar Prasad's statement that artificial intelligence (AI) has massive potential to generate development and India is well-poised to tap into the opportunity with its large pool of skilled professionals. He also said the proposed data protection legislation will give a big fillip to the country's data economy. Domestic indices witnessed a strong rally in the last hour of trade, taking support from the survey report indicated that Indian service sector output broadly stabilized in September. The seasonally adjusted India Services Business Activity Index rose for the fifth straight month in September to 49.8 from 41.8 in August. But, it remained in the contraction zone as incoming new business fell moderately due to the damaging impact of the pandemic on demand, leading to more job losses. Meanwhile, the Centre said it will release Rs 20,000 crore to states on account of GST compensation dues. In the meeting of the 42nd GST Council, Finance Minister Nirmala Sitharaman said the states which received less apportionment of Integrated GST (IGST) for 2017-18, the Centre will next week transfer a cumulative Rs 24,000 crore to them. Finally, the BSE Sensex rose 600.87 points or 1.54% to 39,574.57, while the CNX Nifty was up by 159.05 points or 1.38% to 11,662.40.


The US markets ended lower on Tuesday after US President Donald Trump said  that he would end negotiations on a new fiscal stimulus package sent shivers and triggered the sell-off. Trump said he has instructed his administration's negotiators to stop stimulus discussions with Democrats until after the November 3 presidential election. Meanwhile, Federal Reserve Chairman Jerome Powell said that the US economic recovery remained far from complete and the economy needs more fiscal support. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods. In economic data front, the US trade deficit climbed almost 6% in August to $67.1 billion, the third widest gap on record, reflecting a continuing struggle by American exporters to recover all the ground lost in the early stages of the coronavirus pandemic.  Hiring and job openings in the private sector fell in August in a sign the U.S. labor market was cooling off as an economic recovery lost some of its earlier momentum.


Crude oil futures settled higher on Tuesday, extending their previous session's rally, as investors focused on a strike that's curtailed Norwegian output and Hurricane Delta, which has led to production disruptions in the Gulf of Mexico. Hurricane Delta strengthened into a extremely dangerous Category 4 storm as it took aim on the northeastern coast of the Yucatan peninsula. It's expected to make landfall on the Gulf Coast later this week. In preparation for Delta, the Bureau of Safety and Environmental Enforcement estimated that 29.2% of Gulf oil production and nearly 8.6% of natural-gas output was shut in as of Tuesday afternoon. Crude oil futures for November rose $1.45 or 3.7 percent to settle at $40.67 a barrel on the New York Mercantile Exchange. December Brent crude surged $1.36 or 3.3 percent to settle at $42.65 a barrel on London's Intercontinental Exchange.


Indian rupee concluded substantially weaker against dollar on Tuesday, extending its previous session's loss, on account of continued dollar demand from importers and banks. Sentiments remained weak despite India's service sector activity stabilized in the month of September, with the relaxation of coronavirus pandemic 2019 (COVID-19) restrictions. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index rose to 49.8 in September from 41.8 in August. Meanwhile, RBI in its latest report on 'Data on ECB/FCCB for the month of August 2020' has showed that foreign borrowings of India Inc fell by over 47 per cent in August 2020 to $1.75 billion as compared to $3.32 billion borrowed from overseas markets in August 2019, by way of external commercial borrowings (ECBs). On the global front; Sterling climbed above $1.30 on Tuesday for the first time in three weeks as investors pushed back expectations for when the Bank of England would cut interest rates below zero. Finally, the rupee ended at 73.46, 17 paise weaker from its previous close of 73.29 on Monday.


The FIIs as per Tuesday's data were net buyers in equity segment, while net sellers debt segment. In equity segment, the gross buying was of Rs 5659.61 crore against gross selling of Rs 5318.64 crore, while in the debt segment, the gross purchase was of Rs 1105.93 crore with gross sales of Rs 1503.58 crore. Besides, in the hybrid segment, the gross buying was of Rs 28.93 crore against gross selling of Rs 36.80 crore.


The US markets ended lower on Tuesday after President Donald Trump called off stimulus talks until after the November election. Asian markets are trading mixed on Wednesday following overnight sell-off on the Wall Street. Indian markets ended at a 7-month high on Tuesday, helped by gains in financials and auto stocks. Today, the start of session is likely to be flat-to-positive amid mixed cues from Asian peers. Some support will come with report that companies garnered more than Rs 1 lakh crore from the capital markets in August, a surge of 64 percent from the preceding month, with private placement of debt instruments emerging as the most preferred route for financing business needs. The funds have been mopped-up mainly for business expansion plans, loan repayments and working capital requirements. Traders may take note of report that the Reserve Bank of India (RBI) is widely expected to keep rates steady when its two-day monetary policy committee (MPC) meeting concludes on October 09. The RBI said it will hold the MPC meeting from October 7 to October 9, having delayed it by a week in order to give the government time to appoint three new external members to the panel. Though, there may be some cautiousness with report that the coronavirus cases in India jumped to 7,722,746 with over 69,000 new infections reported across the country. With 991 fatalities in 24 hours, India's death toll stands at 104,591. Banking stocks will be in focus with Fitch Ratings' report that Indian banks are likely to face a tough operating environment in the near term as stressed loans and write-offs are set to increase due to the economic fallout from the coronavirus pandemic. There will be some reaction in aviation stocks with IATA's report that the global airline industry will burn through $77 billion in cash during the second half of 2020 despite the resumption of flight services amid the coronavirus pandemic. There will be some buzz in the IT services sector stocks as Fitch Ratings said the Indian IT services sector is expected to return to high single-digit revenue growth in 2021-2022 galvanised by higher demand for digital transformation after a flattish 2020. Investors will focus on the Q2 results, TCS is among the five companies scheduled to announce their September quarter earnings later in the day.


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  • SBI is actively looking to hive off its digital platform Yono into a separate subsidiary. 
  • RIL's subsidiary -- Jio Platforms with its affiliates and Infibeam Avenues have entered into a definitive agreement. 
  • M&M has launched M-Plus Body & Paint Clinic, a specialized service camp for its customers of the passenger vehicle range. 
  • ICICI Bank has introduced a debit card facility for customers availing the Loan Against Securities from the Bank.
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