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NSE Intra-day chart (08 October 2020)
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Market Commentary 09 October 2020
Markets to get optimistic start ahead of RBI's policy outcome


Indian equity benchmarks logged in sixth straight session of gains on Thursday, led by buying in IT, TECK, Healthcare and Telecom stocks. An upbeat Asian market also added to the jubilant mood on Dalal Street. Markets made a gap-up opening, as sentiments got a boost with the Union health ministry's statement that the number of people recovered from Covid-19 has exceeded those with active infection by more than 48 lakh as the recovery rate surpassed 85% on Wednesday. Buying further crept in with Union Minister VK Singh's statement that highways and infrastructure can spur the country's economic growth. He said the workforce is back at pre-COVID levels, which is a healthy sign and added that good quality road network leads to ease of doing business, goods transportation and economic growth. Market participants also took a note of the chairman of the Standing Committee on Statistics, ministry of statistics and programme implementation Pranob Sen's statement that the government should continue with the stimulus to revive the economy for three years and it should not be one off. Domestic indices extended their upside in afternoon deals, taking support from Principal Economic Adviser Sanjeev Sanyal's statement that the government recognizes the need for further stimulus at an appropriate time to perk up demand in the economy, hit by COVID-19. Addressing the 115th AGM of PHD Chamber of Commerce and Industry, he said there was space on the monetary and fiscal side to implement further stimulus. However, the benchmarks closed below the day's high, paring some gains in the last hour of trade, as World Bank said that India's GDP is expected to contract by 9.6 per cent this fiscal which is reflective of the national lockdown and the income shock experienced by households and firms due to the COVID-19 pandemic, noting that the country's economic situation is much worse than ever seen before. Finally, the BSE Sensex rose 303.72 points or 0.76% to 40,182.67, while the CNX Nifty was up by 95.75 points or 0.82% to 11,834.60.


The US markets ended higher on Thursday, following the rally seen in the previous session. The strength on markets reflected continued optimism about a coronavirus stimulus bill following the latest comments from President Donald Trump. Trump said administration officials and Democrats are starting to have some very productive talks. Meanwhile, House Speaker Nancy Pelosi rejected the idea of passing a stand-alone bill providing aid to airlines without a broader relief package. Pelosi noted that negotiations continue over a broader bill, saying, we are at the table. We want to continue the conversation. We have made some progress, we are exchanging language. On the economic data front, the Labor Department released a report showing initial jobless claims came in above estimates in the week ended October 3rd. The Labor Department said initial jobless claims edged down to 840,000, a decrease of 9,000 from the previous week's revised level of 849,000. Street had expected jobless claims to dip to 820,000 from the 837,000 originally reported for the previous week. The report said the less volatile four-week moving average also fell to 857,000, a decrease of 13,250 from the previous week's revised average of 870,250. Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also tumbled by 1.003 million to 10.976 million in the week ended September 26th.


Crude oil futures ended higher with gains of over 3 percent on Thursday as Hurricane Delta forced the shut-in of more than 90% of the Gulf of Mexico's crude output and the Saudis reportedly consider postponing Organization of the Petroleum Exporting Countries (OPEC) plans to raise output. A strike in Norway also threatened to reduce production in the North Sea. The US Bureau of Safety and Environmental Enforcement said as of Wednesday, 91.53% of Gulf oil production and 61.82% of natural-gas output were shut in as the hurricane churned in the Gulf of Mexico. Crude oil futures for November surged $1.24 or 3.1 percent to settle at $41.19 a barrel on the New York Mercantile Exchange. December Brent crude rose $1.35 or 3.2 percent to settle at $43.34 a barrel on London's Intercontinental Exchange.


Rising for second session, Indian Rupee ended stronger against dollar on Thursday due to fresh selling of the American currency by banks and exporters. Traders were optimistic as RBI stated that the two per cent interest subvention scheme for micro, small and medium enterprises (MSMEs) on loans extended by co-operative banks has been extended till March 31, 2021. However, upside remained capped as World Bank said that India's GDP is expected to contract by 9.6 per cent this fiscal which is reflective of the national lockdown and the income shock experienced by households and firms due to the COVID-19 pandemic, noting that the country's economic situation is much worse than ever seen before. On the global front, dollar and Japanese yen nursed losses after the revival of hopes for some U.S. stimulus spending improved investor sentiment, while the prospect of negative interest rates dragged on the New Zealand dollar. Finally, the rupee ended at 73.24, 9 paise stronger from its previous close of 73.33 on Wednesday.


The FIIs as per Thursday's data were net buyers in equity, while net sellers in debt segment. In equity segment, the gross buying was of Rs 6118.38 crore against gross selling of Rs 5098.45 crore, while in the debt segment, the gross purchase was of Rs 249.24 crore with gross sales of Rs 917.16 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.30 crore against gross selling of Rs 17.70 crore.


The US markets ended in green on Thursday after US President Donald Trump said talks with Congress had restarted on targeted fiscal relief. Asian markets are trading mostly higher on Friday as investors await the release of a private survey of China's services sector activity for September. Indian markets pared some gains but ended higher for the sixth straight session on Thursday as IT stocks gained on buyback plans of Tata Consultancy Services (TCS) and Wipro. Today, the start of session is likely to be positive ahead of the Reserve Bank of India's (RBI) monetary policy outcome later in the day. The newly-constituted Monetary Policy Committee (MPC) of the RBI began its three-day deliberations on Wednesday. There are expectations that RBI MPC will maintain status quo on the benchmark lending rates and accommodative stance in today monetary policy. The monetary policy address will be given by RBI Governor Shaktikanta Das at 10 am today. Some support will come with the Finance Ministry's statement that banks have sanctioned loans of about Rs 1,87,579 crore to 50.7 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector impacted by slowdown caused by the coronavirus pandemic. Though, there may be some cautiousness with former Reserve Bank Governor C Rangarajan's statement that the combined fiscal deficit of states and the centre during the current year may go up to 14 percent against the mandated level of six percent. Besides, India registered over 70,824 new Covid-19 cases, taking the tally to 6,903,812 and the death toll reached 106,521. Meanwhile, rate-sensitive stocks and sectors like banks, real estate, and auto will react to the MPC's decision. Aviation stocks will be in focus as Civil Aviation Minister Hardeep Singh Puri said airlines may be permitted to operate maximum 75 per cent of their pre-COVID scheduled domestic flights if the passenger numbers continue to remain healthy during the next 7-10 days. There will be some reaction in real estate stocks with a private report that India's top eight cities have witnessed 70 per cent fall in gross office space leasing and 43 per cent dip in housing sales during July-September quarter compared with the year-ago period on lower demand amid COVID-19 pandemic.


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  • NTPC has incorporated a Wholly Owned Subsidiary company to undertake renewable energy business. 
  • Titan Company and Montblanc by mutual agreement have ended their joint venture partnership in India. 
  • Infosys has entered into definitive agreement to acquire Blue Acorn iCi. 
  • HDFC Bank has entered into partnership with Apollo Hospitals to launch the HealthyLifeProgramme.
News Analysis