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NSE Intra-day chart (08 September 2020)
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Market Commentary 09 September 2020
Benchmarks to make negative start amid weakness in global peers


Indian equity benchmarks erased their intra-day gains to settle with negative bias on Tuesday, amid selling in blue-chip counters such as Tata Steel, Bharti Airtel, Axis Bank and ONGC. After making a cautious start, key indices gained traction and traded firmly higher for most part of the day, as traders took support with report that the Reserve Bank of India (RBI) announced a special round of simultaneous sale and purchase of government securities (G-Secs) for Rs 10,000 crore each, on September 10, 2020. It has released details of the sale and purchase of securities, which will be done using the multiple price auction method. Some optimism also came with industry chamber Assocham's statement that the rate of decline in output of core segments of the economy has been arrested considerably in July 2020. In line with an evaluation by Assocham, cement, steel and coal, which suffered heavy declines in the first quarter, recovered significantly in July 2020, even though the annualised numbers reflect contraction. However, the benchmark indices failed to hold initial gains and fell in the final minutes of trade to end with minor cuts, as traders got anxious with Moody's Investors Service's report that the continued rise in new infection rates across parts of Europe and Asia highlights the risk of a second wave of infections which could lead to renewed closures and a sustained pullback in consumption. Some cautiousness also came after domestic rating agency India Ratings and Research revised the country's FY21 GDP growth forecast to (-) 11.8 per cent from (-) 5.3 per cent earlier. The agency, however, expects India's gross domestic product (GDP) to rebound and grow at 9.9 per cent year-on-year in FY22 mainly due to the weak base of FY21. Meanwhile, the Finance Ministry said banks have sanctioned loans of about Rs 1,61,017 crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector reeling under the slowdown caused by the coronavirus pandemic. Finally, the BSE Sensex fell 51.88 points or 0.14% to 38,365.35, while the CNX Nifty was down by 37.70 points or 0.33% to 11,317.35.


The US markets ended sharply lower on Tuesday, extending the pullback seen over the course of the two previous sessions, led by technology stocks which had driven the five month rally, as the Nasdaq Composite booked its quickest plunge ever from a record close to correction territory. Technology stocks helped to lead the way lower once again, as Facebook, Amazon, Microsoft and Apple all posted steep losses on the day. High valuations especially for technology companies, a sluggish economic recovery in the wake of the coronavirus pandemic, geopolitical risks including US - China tensions, and the upcoming November elections all posed risks for investors. President Donald Trump vowed to end the country's reliance on trade with China. Trump raised the idea of decoupling the US and Chinese economies. He threatened to punish American companies that create jobs overseas and to prevent those that do business in China from winning federal contracts. Trump said we will manufacture our critical manufacturing supplies in the United States, we will create made in America tax credits and bring our jobs back to the United States and we will impose tariffs on companies that desert America to create jobs in China and other countries. Meanwhile, China said it would launch an initiative of its own to set global standards on data security, a move seen as an attempt to counter US efforts to isolate their networks from Chinese technology.


Crude oil futures ended deeply in red on Tuesday on renewed worries about outlook for energy demand. Rising tensions between the US and China, a stronger dollar and reports showing a sharp spike in coronavirus cases across several parts of Europe sent crude oil prices crashing down. Meanwhile, a report said that Saudi Arabia plans to cut its oil prices in October. Crude oil futures for October dropped $3.01 or 7.6 percent to settle at $36.76 a barrel on the New York Mercantile Exchange. November Brent crude fell $2.23 or 5.3 percent to settle at $39.78 a barrel on London's Intercontinental Exchange.


Indian rupee ended significantly lower against dollar on Tuesday, on increased demand for the greenback from importers and banks. This is the second consecutive session when the rupee was traded lower against dollar. Sentiments remained fragile as Domestic rating agency, India Ratings and Research (Ind-Ra) in its latest report has revised its FY21 gross domestic product (GDP) growth forecast further downward to negative 11.8% from negative 5.3% earlier. However, the rating agency said that GDP is expected to rebound and grow at 9.9% year-on-year in FY22 mainly due to the weak base of FY21. On the global front; pound sank to two-week lows against the dollar on Tuesday, extending losses as fears grew that Britain is preparing to undercut its Brexit divorce treaty and potentially torpedo its trade talks with the European Union. Finally, the rupee ended at 73.60, 25 paise weaker from its previous close of 73.35 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 3743.11 crore against gross selling of Rs 3573.91 crore, while in the debt segment, the gross purchase was of Rs 374.82 crore with gross sales of Rs 562.95 crore. Besides, in the hybrid segment, the gross buying was of Rs 34.39 crore against gross selling of Rs 70.38 crore.


The US markets closed lower for a third straight session on Tuesday as heavyweight technology names extended their sell-off. Asian markets are trading in red on Wednesday as the shares on Wall Street tumbled overnight stateside. Indian markets ended with minor cuts on Tuesday dragged by selling across most key indices, however, IT stocks and index heavyweight RIL capped gains. Today, markets are likely to start the day on a weak note, following negative trends in major Asian peers, coupled with concerns over India-China tensions. Rising coronavirus cases in the country are likely to dampen sentiments in the markets. India has recorded nearly 90,000 new Covid-19 cases in the past 24 hours. With this, the country's tally has surged past the 4.3 million mark to 4,367,436. Death toll has climbed to 73,923. traders will also be concerned with report that the clinical trials for the Covid-19 vaccine candidate developed by the University of Oxford, which was expected to start at PGIMER in Chandigarh, have been delayed by at least a week over safety approvals. There will be some cautiousness with report that the coronavirus pandemic-stricken states have borrowed a whopping Rs 2.97 trillion so far this financial year, which is as much as 51 per cent more than the corresponding period a year ago. However, some support may come later in the day with a private report that the Indian economy is expected to climb from a deeper trough in the calendar year 2020 (CY20) and see a stronger rebound in the year 2021. Meanwhile, Capital markets regulator Sebi added the National Stock Exchange (NSE) to the list of entities that can undertake e-KYC Aadhaar authentication. Aviation stocks will be in focus with a private report that government is all set to operationalize 26 new airports and award another 12 airports for development through the public-private partnership (PPP) mode this fiscal. There will be some reaction in insurance companies stocks with report that life insurers have posted an almost 15% rise in first-year premium in August thus building on the growth momentum of the previous month after a dismal first quarter this fiscal. Besides, the IPO of Route Mobile opens for public subscription today. The cloud communications service provider proposes to raise Rs 600 crore through the IPO. A price band of Rs 345 to 350 apiece per share has been fixed for the IPO that will conclude on September 11.


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



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  • Dr. Reddy's Laboratories has launched Fulvestrant Injection, 250 mg/5 mL (50 mg/mL) per Single-dose Syringe, approved by the USFDA. 
  • Wipro has entered into multi-year global agreement with Marelli for automotive engineering services. 
  • Tech Mahindra is teaming with Amazon Web Services to build solutions based on blockchain technology. 
  • Bharti Airtel has launched unlimited category broadband plans starting at Rs 499 per month.
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