Daily Newsletter
NSE Intra-day chart (15 July 2020)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 16 July 2020
Benchmarks to open marginally in red amid weakness in Asian peers

 

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.
News Analysis