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NSE Intra-day chart (14 August 2020)
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Market Commentary 17 August 2020
Benchmarks to make optimistic start amid positive Asian cues


Indian equity benchmarks traded with a positive bias for most part of the day but selling activity which took place during late hour of trade mainly forced the markets to cut all of their gains and ended Friday's session with losses of over a percent each, amid selling in Auto, Banking and Finance counters. The benchmarks opened higher and were trading in a narrow range, as traders took some support with the Union Health Ministry's statement that the Covid-19 recovery rate has risen to 70.77 per cent on August 13 with the total number of patients recuperating from the disease reaching nearly 1.7 million, while the case fatality rate has further declined to 1.96 per cent. Sentiments remained positive with Finance Minister Nirmala Sitharaman's statement that the faceless tax scrutiny assessment and appeal system would help ease compliance burden of taxpayers and increase fairness and objectivity in the tax system. However, key indices wiped off morning gains and fell sharply in the late afternoon session, amid cooling off buying interest across sectors. Some cautiousness also came in with the data released by the National Statistics Office (NSO) showing that India's retail inflation as measured by the Consumer Price Index (CPI) increased to 6.93 percent in the month of July as food prices continued to soar due to disrupted supply chains. Though, markets managed to trim some losses in final minutes of trading, taking support from data showing that the wholesale price-based inflation declined 0.58 per cent in July, even as food items turned costlier. WPI inflation in June was at (-) 1.81 per cent, while for the month of May and April it was (-) 3.37 per cent and (-) 1.57 per cent respectively. However, fuel and power basket inflation fell 9.84 per cent in July, compared to 13.60 per cent in the previous month. Manufactured products, however, witnessed inflation of 0.51 per cent in July, as against 0.08 per cent in June. Finally, the BSE Sensex fell 433.15 points or 1.13% to 37,877.34, while the CNX Nifty was down by 122.05 points or 1.08% to 11,178.40.


The US markets ended choppy trading session mostly in red in Friday as traders seemed reluctant to make more significant moves amid uncertainty about the near-term outlook for the markets. With earnings season largely in the rear-view mirror and talks about a new coronavirus relief bill at a stalemate, traders may be unsure about the next catalyst to drive the markets. Traders also digested a slew of US economic data, including a report from the Commerce Department showing retail sales jumped by less than expected in July amid a pullback in auto sales. The Commerce Department said retail sales advanced by 1.2 percent in July after soaring by an upwardly revised 8.4 percent in June. Street had expected retail sales to jump by 1.9 percent compared to the 7.5 percent spike originally reported for the previous month. Excluding sales by motor vehicle and parts dealers, retail sales surged up by 1.9 percent in July after skyrocketing by 8.3 percent in June. Ex-auto sales were expected to increase by 1.3 percent. Meanwhile, the Federal Reserve released a report showing a jump in US industrial production in the month of July that matched street estimates. The Fed said industrial production surged up by 3.0 percent in July after soaring by an upwardly revised 5.7 percent in June. Street had expected production to jump by 3.0 percent compared to the 5.4 percent spike originally reported for the previous month. Despite the substantial increases seen over the past two months, the Fed noted production is still 8.4 percent below its pre-pandemic February level. A preliminary reading released by the University of Michigan unexpectedly showed a slight improvement in U.S. consumer sentiment in the month of August. The report said the consumer sentiment index inched up to 72.8 in August from 72.5 in July. The uptick surprised street, who had expected the index to edge down to 72.0.


Crude oil futures ended lower on Friday after retail sales and industrial production numbers for July continue to point to weak recovery in China. Official data showed that China's industrial production grew 4.8 percent on a yearly basis in July, the same rate of growth as seen in June, and weaker than the expected rise of 5.1 percent. Retail sales dropped 1.1 percent from last year, confounding expectations for an increase of 0.1 percent. During January to July period, fixed asset investment decreased 1.6 percent versus a 3.1 percent decrease in January to June. Crude oil futures for September dropped 23 cents or 0.5 percent to settle at $42.01 a barrel on the New York Mercantile Exchange. October Brent crude fell 11 cents or 0.2 percent to settle at $44.85 a barrel on London's Intercontinental Exchange.


Indian rupee ended weaker against dollar on Friday, on emergence of demand for the greenback from importers. Sentiments remained fragile as government data showed retail inflation rose to 6.93 per cent in July, mainly driven by rising prices of food items like vegetables, pulses, meat and fish. The inflation based on the Consumer Price Index (CPI) stood at 3.15 percent in July 2019. Meanwhile, RBI remained net purchaser of the US currency for the second consecutive month in June after it bought $9.814 billion of greenback on a net basis. On the global front, dollar steadied on Friday as a spike in U.S. bond yields and a drag on risk sentiment from lackluster Chinese economic data slowed a sell down of the U.S. currency, which was headed for its longest weekly losing streak since 2010. Finally, the rupee ended at 74.90, 6 paise weaker from its previous close of 74.84 on Thursday.


The FIIs as per Friday's data were net buyers in both equity segment and debt segment. In equity segment, the gross buying was of Rs 4552.48 crore against gross selling of Rs 4055.56 crore, while in the debt segment, the gross purchase was of Rs 888.14 crore with gross sales of Rs 297.44 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.13 crore against gross selling of Rs 25.02 crore.


The US markets closed mostly lower on Friday after a weaker-than-expected rise in retail sales underlined lingering questions about the economy's resilience following its pandemic-induced collapse in the spring. Asian markets are trading mostly in green on Monday as investors waited to see if the recent sell-off in longer-dated US. Indian markets gave up early gains and ended lower on Friday, with rate-sensitive bank, auto and financial services firms declining after data showed India's retail inflation inched close to the 7% mark in July. Today, the start of new week is likely to be optimistic following positive cues from Asian peers. Some support will come in with report that foreign portfolio investors (FPI) remained net investors in Indian markets in the first half of August, pumping in Rs 28,203 crore in debt and equities on net basis in the period. Traders may take note of president of CII's statement that PM's address was an address of confidence in COVID times combined with aspiration & hope. India has to understand the global trend, which is instead of multilateralism to bilateralism. Move away from multilateralism because that is out of fashion as I see it. Besides, the Reserve Bank of India's (RBI's) data showed that the country's foreign exchange reserves swelled by $3.623 billion to a record high of $538.191 billion in the week ended August 7. However, rising coronavirus cases may impact the market sentiments. India has recorded over 58,108 coronavirus cases in the past 24 hours, taking its total to 2,647,316. With over 961 fatalities reported on Sunday, the country's death toll has surged to 51,045. Some cautiousness may be there in the markets as the government data showed that contracting for the fifth straight month, India's exports slipped 10.21 per cent to $23.64 billion in July, on account of decline in the shipments of petroleum, leather and gems and jewellery items. Telecom stocks will be in limelight as the Supreme Court will again hear the AGR case today. In last week's hearing, the Supreme Court had directed telecom companies under insolvency to submit details of spectrum sharing agreements that they have entered into. Banking stocks will be in focus with latest data from the RBI showing that bank credit and deposits grew 5.51 per cent and 11.11 per cent to Rs 102.65 trillion and Rs 141.61 trillion, respectively, in the fortnight ended July 31. There will be some reaction in agriculture related stocks with report that as the sowing of kharif crops enters its last leg, acreage this year has been almost 8.54% more than last year as of August 14.


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



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NSE Nifty




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Nifty Top volumes





Previous close (Rs)


Support  (Rs)


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(in Lacs)

Tata Motors





State Bank of India





Tata Steel





Zee Entertainment Enterprises





Axis Bank






  • Tata Motors has launched India's first 47.5-tonne multi-axle tipper truck for surface transport of coal and construction goods, priced at Rs 52.81 lakh. 
  • Eicher Motors and Volvo Group's JV -- VE Commercial Vehicles is going to acquire Volvo Group's bus business in India for Rs 100.5 crore. 
  • Infosys has expanded its support for GovHack 2020 which is set to kick off on August 14. 
  • L&T's construction arm -- L&T construction has commenced executing a contract by its Heavy Civil Infrastructure Business.
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