Erasing all of their intra-day
gains, Indian equity benchmarks ended in the negative territory on Monday as
telecom, banking, finance and energy shares came under selling pressure. The
broader markets, however, outperformed after market regulator Securities and
Exchange Board of India (Sebi) tweaked the asset allocation norms for Multi-Cap
Funds. According to the new norms, multi-cap funds must invest 25 percent each
in small, mid, and large-cap stocks. The benchmarks made an optimistic start
and traded on a strong note for most part of the day, as sentiments got a boost
as Chief Economic Adviser K V Subramanian exuded confidence that retail
inflation will come down in the days ahead with the easing of lockdowns,
attributing the rise in inflation to supply-side frictions. Some support also
came in as the finance ministry said banks have sanctioned loans worth over Rs
1.63 lakh crore to more than 42 lakh business units under the Rs 3-lakh crore
Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector. However,
local indices failed to carry forward positive momentum in late trade and ended
with marginal losses, as traders got anxious with CARE Ratings' report that
India's Gross Domestic Product (GDP) is likely to see a sharper contraction of
8-8.2 percent in the current financial year (FY21) under the assumption of
there being no fiscal stimulus from the government. It said this would imply
that there would be no increase in capital expenditure (capex) during the year
beyond what is provided in the Budget. Some cautiousness also came as India's
industrial output contracted 10.4 percent in July as against a 4.9 percent
growth year-on-year (YoY). Traders may be concerned as rating agency Moody's
projected India's real gross domestic product (GDP) to contract by 11.5 percent
in FY21. Besides, India's inflation based on wholesale price index (WPI) surged
0.16% in the month of August, 2020 (over August, 2019) as compared to 1.17%
during the corresponding month of the previous year. Finally, the BSE Sensex
fell 97.92 points or 0.25% to 38,756.63, while the CNX Nifty was down by 24.40
points or 0.21% to 11,440.05.
The US markets ended higher on
Monday amid fresh hope for a coronavirus vaccine, a flurry of initial public
offerings and potential corporate mash-ups, including reports that Oracle plans
to forge a partnership with TikTok, the popular China-based social-media
platform. An agreement to link up TikTok with a US company comes amid rising
tensions between America and China, with President Donald Trump threatening
repeatedly to shut down TikTok in the US if it isn't sold to an American
company by September 15. The rally on markets partly reflected a rebound by
technology stocks, which recovered after leading the markets lower last week.
The significant advance by the Nasdaq comes after the tech-heavy index plunged
by 4.1 percent last week in its worst week since March. Apple (AAPL) has been a
key driver of the markets in recent sessions and advanced by 3 percent after
ending the previous session at its lowest closing level in a month. Shares of
Nvidia also saw considerable strength after the graphics chip maker announced a
$40 billion acquisition of chip designer Arm Holdings.
Crude oil futures ended lower on
Monday as the Organization of the Petroleum Exporting Countries (OPEC) further
reduced its outlook for demand growth, as well as the potential for more oil
from Libya. OPEC, in its monthly report, said it now expects 2020 oil demand to
contract by 9.5 million barrels a day to 90.2 million barrels a day, versus its
previous call for a 9.1 million barrel-a-day fall. It also lowered its outlook
for demand growth in 2021, citing the lingering effects of the coronavirus. Crude
oil futures for October fell 9 cents or 0.2 percent to settle at $37.24 a
barrel on the New York Mercantile Exchange. November Brent crude declined 22
cents or 0.6 percent to settle at $39.61 a barrel on London's Intercontinental
Exchange.
Indian rupee ended higher against
dollar on Monday, owing to dollar sale by exporters and banks. Sentiments
remained upbeat despite Moody's Investors Service in its latest report has
projected that India's Gross Domestic Product (GDP) growth rate to contract
11.5% for the financial year 2020-21 (FY21), from (-) 4% estimated earlier.
Meanwhile; India's inflation based on wholesale price index (WPI) surged 0.16%
in the month of August, 2020 (over August, 2019) as compared to 1.17% during
the corresponding month of the previous year. On the global front; dollar retreated
on Monday against major peers as a wave of M&A deals lifted the mood on
global equity markets and investors looked ahead to an event-packed week which
includes a Fed meeting and the appointment of a new Japanese premier. Finally,
the rupee ended at 73.48, 5 paise stronger from its previous close of 73.53 on
Friday.
The FIIs as per Monday's data
were net buyer in equity, while they were net seller in debt segment. In equity
segment, the gross buying was of Rs 6763.50 crore against gross selling of Rs
4305.73 crore, while in the debt segment, the gross purchase was of Rs 386.08
crore with gross sales of Rs 799.35 crore. Besides, in the hybrid segment, the
gross buying was of Rs 19.18 crore against gross selling of Rs 24.92 crore.
The US markets ended notably
higher on Monday as signs of progress in developing a covid-19 vaccine and a
spurt of multibillion-dollar deals lifted investor optimism. Asian markets are
trading mostly in green on Tuesday as investors focused on the outcome of a
Federal Reserve meeting for clues on monetary policy as economies recover from
the pandemic. Indian markets ended lower on Monday, after a volatile session,
dragged by financials and heavyweights RIL and Bharti Airtel. Today, the start
of session is likely to be flat to positive tracking gains in global peers.
Traders will be taking encouragement with the government data showing that
India's consumer inflation in August came at 6.69%, slightly lower than 6.73%
recorded in the previous month. Some support will come with the Reserve Bank of
India's (RBI) report that bank credit grew 5.49 percent to Rs 102.11 lakh
crore, while deposits increased 10.92 percent to Rs 141.76 lakh crore in the
fortnight ended August 28. Market participants may take note of SBI's report
that the country needs to adopt an activist fiscal policy rather than depending
on the monetary accommodation alone for turning the economic fortunes. However,
there may be some cautiousness as S&P Global Ratings cut India's FY21 GDP
forecast to -9 percent from -5 percent as it believes that rising COVID-19
cases in the country will keep private spending and investment lower for
longer. Also, investors may be concerned with over 81,000 new cases, India's
coronavirus tally has reached 4,926,914. The death toll has risen by 1,073 to
80,827. Meanwhile, the government has banned the export of all varieties of
onions with immediate effect, a move aimed at increasing availability and
checking price of the commodity in the domestic market. Banking stocks will be
in focus with report that banks' non-performing assets in large industry and
services declined 31 percent in over two years to about Rs 4.36 lakh crore in
June this year.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,440.05
|
11,359.44
|
11,544.79
|
BSE Sensex
|
38,756.63
|
38,476.48
|
39,133.47
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
845.06
|
148.55
|
145.66
|
151.26
|
State Bank of India
|
636.07
|
198.50
|
195.16
|
204.01
|
Bharti Airtel
|
520.56
|
474.10
|
462.51
|
491.46
|
Wipro
|
380.90
|
307.20
|
297.39
|
312.79
|
HCL Technologies
|
323.12
|
794.95
|
751.04
|
831.99
|
HCL Technologies is expecting its revenue and operating margin for Q2FY21 to be meaningfully better than the top end of its previous forecast.
Infosys has entered into definitive agreement to acquire GuideVision, one of the largest ServiceNow Elite Partners in Europe.
Larsen & Toubro's construction arm -- L&T construction has secured orders from prestigious clients for its varied businesses.
Wipro has entered into partnership with and ProcessMaker for delivering innovative workflow management to Wipro's customers in Latin America.