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NSE Intra-day chart (07 December 2020)
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Market Commentary 08 December 2020
Markets to make flat-to-negative start on Tuesday

 

Bulls continue to strengthen their position on Dalal Street with frontline gauges hitting fresh all-time highs amid persistent foreign fund inflow and hopes for a coronavirus vaccine. Markets started the session with caution on concern over increasing coronavirus cases. On Sunday, India reported 32,272 fresh Covid-19 cases. Its case tally now stands at 9,676,801. The country's death toll has mounted to 140,590. However, markets soon gained traction as traders turned optimistic with Niti Aayog vice chairman Rajiv Kumar's statement that India's economic growth is likely to reach pre-COVID-19 levels by the end of the 2021-22 fiscal as the GDP contraction in this financial year is expected to be less than 8 per cent. Some support also came in with report that foreign direct investment (FDI) equity inflows into India crossed the $500 billion milestone during April 2000 to September 2020 period, firmly establishing the country's credentials as a safe and key investment destination in the world. Markets extended rally to close near all-time highs as traders took encouragement with reports that the Ministry of Commerce and Industry and the Ministry of AYUSH have decided to work together to set up an Export Promotion Council to boost export of AYUSH products, according to an official statement on Sunday. The decision was taken recently in a joint review meeting attended by Commerce and Industry Minister Piyush Goyal and Minister of AYUSH Shripad Naik. Meanwhile, Union minister Dharmendra Pradhan expressed hope that fuel prices would stabilise as the Organization of the Petroleum Exporting Countries (OPEC) has decided to increase the crude oil production. OPEC decided to increase the crude oil production by 5 lakh barrels a day. Finally, the BSE Sensex jumped 347.42 points or 0.77% to 45,426.97, while the CNX Nifty was up by 97.20 points or 0.73% to 13,355.75.

 

The US markets ended mostly lower on Monday as traders seemed to be waiting for further developments regarding a potential stimulus bill before making any substantial bets. The choppy trading on markets came as traders seemed reluctant to make significant moves after the major averages all reached record closing highs last Friday. Meanwhile, a quiet day on the US economic front also kept traders on the sidelines. Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets. Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index both tumbled by 2.6 percent and the Philadelphia Oil Service Index slumped by 2.3 percent. However, the UK began to offer Pfizer's Covid-19 vaccine. A US approval is possible later this week. Despite the positive vaccine news, investors were concerned over comments from the White House's coronavirus response coordinator, Dr. Deborah Birx, who warned about rising cases, hospital overload and unprecedented times.

 

Crude oil futures ended lower on Monday as rising Covid-19 cases prompted more lockdowns around the world, threatening a global economic recovery. Meanwhile, California entered another wide-sweeping lockdown as the US notched a record number of coronavirus cases in 24 hours for the third day running. Hard-hit Los Angeles County reached another alarming milestone in the coronavirus surge, surpassing 10,000 new daily cases. Besides, rising US-China tensions and reports suggesting that Iran is preparing to raise oil exports also weighed on the commodity. Crude oil futures for January dropped 1 percent to settle at $45.83 a barrel on the New York Mercantile Exchange. February Brent crude lost 0.7 percent to settle at $48.89 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended lower against dollar on Monday, on account of sustained dollar demand from importers and banks. Sentiments were impacted with RBI's latest consumer confidence survey which showed that consumer confidence remained very low in November 2020 when compared to a year ago, though it showed a marginal improvement over the all-time low recorded in the previous round. Traders shrugged off report of Department for Promotion of Industry and Internal Trade (DPIIT) showing that foreign direct investment (FDI) equity inflows into India crossed the $500 billion milestone during April 2000 to September 2020 period. The inflows during the period stood at $500.12 billion. However, strong gains in domestic equity markets provided some support to the rupee, keeping the downside in check. On the global front; dollar index remained near two-and-a-half-year low on Monday as weak US jobs data last week heightened expectations of economic aid, while sterling sank as Britain and the European Union made a last-ditch attempt to strike a trade deal. Finally, the rupee ended at 73.90, 10 paise weaker from its previous close of 73.80 on Friday.

 

The FIIs as per Monday's data were net buyer in equity segment and net seller in debt segment. In equity segment, the gross buying was of Rs 9892.94 crore against gross selling of Rs 6732.93 crore, while in the debt segment, the gross purchase was of Rs 582.95 crore with gross sales of Rs 684.28 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.01 crore against gross selling of Rs 5.75 crore.

 

The US markets ended mostly lower on Monday as traders kept an eye on negotiations for additional fiscal stimulus while the US coronavirus caseload continues to rise. Asian markets are trading mixed on Tuesday as investors remained cautious over rising coronavirus cases, US stimulus negotiations as well as Brexit talks between the UK and the European Union. Indian markets ended at fresh record high on Monday led by the gains from financials, pharma and FMCG stocks. Today, the markets are likely to make flat-to-negative start tracking mixed global cues. There will be some cautiousness with report that on Monday, India reported 27,107 fresh Covid-19 cases. Its case tally now stands at 9,703,908. The country's death toll has mounted to 140,994. With 18,55,341 cases, Maharashtra has the highest number of coronavirus cases, followed by Karnataka 894,004, Andhra Pradesh 872,288, Tamil Nadu 791,552, and Kerala 631,615. Though, some respite may come later in the day with Niti Aayog vice chairman Rajiv Kumar's statement that the government is committed to improving the ease of doing business and innovation ecosystem where every school student has access to the innovative tools and trends.  Traders may take note of report that Companies raised Rs 73,215 crore from the capital markets in October, with private placement of debt instruments continuing to be the most-preferred route for funding. Meanwhile, farmers across India have called for a Bharat Bandh on December 8. They have been holding protests against agrarian laws passed recently in Parliament. The bandh was called by the protesting farmers after several rounds of talks with the Central government failed. While the Centre is firm on its stance on the laws, farmers want them rolled back as they fear, they will be at the mercy of corporates to sell their produce. Banking and financial counters may remain in focus as the Supreme Court is set to resume hearing in the Interest Waiver/Loan Moratorium case. There will be some reaction in pharma sector stocks with a private report that Pfizer and Serum Institute of India have sought emergency use approval for their respective COVID-19 vaccines from the Drug Controller General of India (DCGI) and an internal review has begun under the accelerated review process.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

13,355.75

13,276.25

13,400.95

BSE Sensex

45,426.97

45,147.98

45,582.43

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

State Bank of India

760.53

269.60

264.59

273.04

Oil & Natural Gas Corporation

466.38

91.55

90.20

93.45

ICICI Bank

377.78

510.45

504.54

515.99

ITC

356.93

203.15

199.25

205.40

Tata Motors

298.02

183.55

182.01

185.76

 

  • NTPC has made an offer to buy back its masala bonds worth Rs 4,000 crore from bondholders or lenders. 
  • L&T's the Construction and Mining Equipment business has secured multiple orders for supply of 90 units of Komatsu Mining Equipment from Coal India subsidiaries. 
  • Maruti Suzuki India has reported 5.91% rise in its total production at 1,50,221 units in November 2020 as compared to 1,41,834 units produced in the same month last year. 
  • Eicher Motors and Volvo Group's JV -- VECV has started the commercial operations at its new, state-of-the-art truck manufacturing unit at Bagroda, Bhopal.
News Analysis