Indian stock markets surrendered
most of the day's gains to settle on flat note in Wednesday's volatile session,
following an intense selloff in heavyweight Reliance Industries at the fag-end
of the session. Key gauges made a magnificent start and traded with strong
gains for most part of the day, driven by positive sentiment across global
markets on hopes of a COVID-19 vaccine. Traders took encouragement after the
Indian Council of Medical Research (ICMR) said that two indigenous vaccine
candidates for Covid-19 will enter human trials this month. Sentiments remained
up-beat with Commerce and Industry Minister Piyush Goyal's statement that the
government is working on creating a genuine single window clearance mechanism
and mapping the entire land bank available for the industry and industrial
development. Market participants also took a note of Former Reserve Bank
Governor D Subbarao's statement that the government needs to build on some
silver linings in the farm sector, driven by the prospect of a favourable
monsoon, to speed up the economic recovery. The indices, however, gave up most
of their morning gains in final hour of trade, as traders turned cautious with
India Ratings and Research's (Ind-Ra) latest report stating that private
sector's capital expenditure (capex) is set to contract by 20-26 percent in the
current financial year (FY21) due to COVID-19 pandemic-led business
disruptions. Some concern also came with former RBI governor Raghuram Rajan's
statement that non-performing assets of the banking sector are likely to
witness unprecedented increase in the next six months and the sooner the
problem is recognised the better it would be. The outbreak of COVID-19 and
subsequent lockdown to curb the spread of disease has hit businesses hard and
many of them are facing difficulty in servicing debt. Finally, the BSE Sensex
rose 18.75 points or 0.05% to 36,051.81, while the CNX Nifty was up by 10.85
points or 0.10% to 10,618.20.
The US Markets ended higher,
extending their previous session gains, as investors focused on COVID-19
vaccine hopes and early signs of an upswing in business activity during the
pandemic. Biotech firm Moderna (MRNA) said its experimental vaccine for COVID-19
was safe and produced strong immune responses in all 45 patients in an ongoing
early-stage human trial. An interim analysis of the open-label Phase 1 study of
the vaccine candidate was published in the New England Journal of Medicine.
Further, investors also bid equities higher as the first few corporate earnings
reports for the second quarter have come in better than expected, even as the
number of coronavirus cases rise in many US states. On the economic data front,
Industrial production in the US spiked by even more than anticipated in the
month of June, according to a report released by the Federal Reserve. The
report said industrial production soared by 5.4 percent in June after jumping
by 1.4 percent in May. Street had expected production to surge up by 4.3
percent. Despite the substantial increase, the Fed noted industrial production
remained 10.9 percent below its pre-pandemic February level. Meanwhile, the
Federal Reserve Bank of New York released a report showing New York
manufacturing activity expanded in the month of July. The New York Fed said its
general business conditions soared to a positive 17.2 in July from a negative
0.2 in June, with a positive reading indicating growth in regional
manufacturing activity. Street had expected the index to jump to 10.0.
Crude oil futures settled higher
on Wednesday, buoyed by the biggest weekly decline in US crude supplies so far
this year. The Energy Information Administration (EIA) reported that domestic
crude inventories fell by 7.5 million barrels for the week ended July 10. That
compared with a forecast by S&P Global Platts for an average decline of 2.1
million barrels. The American Petroleum Institute on Tuesday reported a drop of
8.3 million barrels. Further, Positive news on the coronavirus vaccine front
also contributed to oil's rise as the report helped reduce fears of another
large scale lockdown. Crude oil futures for August gained 91 cents or 2.3
percent to settle at $41.20 a barrel on the New York Mercantile Exchange.
September Brent crude rose 89 cents or 2.2 percent to settle at $43.79 a barrel
on London's Intercontinental Exchange.
Indian rupee ended significantly
higher against dollar on Wednesday, on persistent selling of the American
currency by exporters. Investors' sentiment strengthened after the human
clinical trials for Covid -19 vaccine were initiated in India. Gains in
domestic equity markets also provided support to the rupee. Sentiments remained
buoyant with PM Narendra Modi's statement that the India-EU summit will
strengthen economic, cultural ties, jobs, trade, and other issues on cards. The
15th summit between India and the European Union will be held today via video conference.
On the global front, euro rose to a four-month high against the dollar on
Wednesday on hopes European Union leaders may agree on stimulus and deepening
fiscal integration to shield the economy from the pandemic. Finally, the rupee
ended at 75.15, 27 paise stronger from its previous close of 75.42 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 3567.15 crore against gross
selling of Rs 5158.72 crore, while in the debt segment, the gross purchase was
of Rs 1940.14 crore with gross sales of Rs 1089.51 crore. Besides, in the
hybrid segment, the gross buying was of Rs 2.68 crore against gross selling of
Rs 22.93 crore.
The US markets ended higher on
Wednesday on the back of positive coronavirus vaccine news and a blowout
quarter from Goldman Sachs. Asian markets are trading mostly in red on Thursday
as investors await the release of a slew of Chinese economic data expected
later in the day. Indian markets gave up early gains and ended flat on
Wednesday as gains in IT stocks were offset by losses in index heavyweights RIL
and Bharti Airtel. Today, the markets are likely to get slightly negative start
following lackluster cues from Asian peers. Rising coronavirus cases will also
impact the sentiments in markets. India has recorded over 32,000 Covid-19 cases
in the past 24 hours - its biggest single-day spike yet - to take its total
number of coronavirus cases to 970,169. With over 600 deaths on Wednesday, the
country's Covid-19 death toll has now reached 24,929. There will be some
cautiousness with the Commerce and Industry Ministry's data showing that
contracting for the fourth straight month, India's exports declined by 12.41%
to $21.91 billion in June mainly due to drop in shipments of petroleum,
textiles, engineering goods, and gems and jewellery items. Imports too plunged
47.59% to $21.11 billion in June, leaving a trade surplus of $0.79 billion,
compared to a deficit of $15.28 billion in the same month of the last year.
However, some respite may come later in the day as Former RBI Governor Raghuram
Rajan said the government should focus on spending on profitable firms, which
have been incurring costs but have not earned revenues in the last four months.
Some support may come with NITI Aayog CEO's statement that India is set to make
the Public Distribution System location independent to ensure that no one,
especially the inter-state migrants, is left behind, citing the One Nation, One
Card initiative being implemented by the government as a transformative
solution in response to the COVID-19 pandemic. Traders may take note that
global rating firm S&P Global applauded the decision of India banks to
raise fresh capital stating that the move will provide solidity to the
organisations during these rocky times and assist them to withstand the
economic slump amid the coronavirus pandemic. There will be some buzz in sugar
stocks as a group of ministers, headed by Home Minister Amit Shah, recommended
increasing the minimum selling price (MSP) of sugar by Rs 2 to 33 per kg to
ensure mills clear the pending cane arrears of around Rs 20,000 crore at the
earliest. There will be some reaction in aviation stocks with rating agency
Crisil's statement that curtailed mobility of people due to the Covid-19
pandemic is expected to shrink India's domestic air passenger traffic by 40-45
per cent in FY21. There will be lots of important earnings announcements too,
to keep the markets in action.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,618.20
|
10,521.48
|
10,771.18
|
BSE Sensex
|
36,051.81
|
35,694.43
|
36,609.72
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Wipro
|
1,303.68
|
262.75
|
242.27
|
275.97
|
Reliance Industries
|
644.59
|
1,844.00
|
1,768.40
|
1,949.20
|
State Bank of India
|
585.28
|
183.80
|
181.22
|
188.17
|
Tata Motors
|
496.89
|
103.20
|
101.53
|
105.83
|
Axis Bank
|
432.51
|
426.65
|
418.12
|
439.82
|
Wipro has signed an agreement to acquire Brazil-based IVIA Servicos de Informatica Ltda.
Reliance Industries' wholly-owned subsidiary -- Jio Platforms has signed binding agreements with Google International LLC.
Maruti Suzuki India is going to recall of WagonR manufactured between November 15, 2018 and October 15, 2019.
Tata Motors' wholly owned subsidiary -- JLR has unveiled its MY 21 Range Rover and Range Rover Sport models, including cars with new mild hybrid electric vehicle engine.