In a highly volatile session,
Indian equity benchmarks scaled down from the day's high during the closing
hours of trade but still managed to end the day with minor gains on Wednesday,
on the back of buying in select blue-chip counters. Key indices made optimistic
start and stayed in green for whole day, as traders took some support with
Nasscom's report that driving utilisation of data and artificial intelligence
(AI) could play a crucial role in realising India's 2025 vision of inclusive
development and deliver over $500 billion in value to the economy. According to
the industry body, this segment could account for 10 per cent of the country's
GDP by 2025. The sentiments remained on optimistic side with Union Minister
Nitin Gadkari's statement that the government is considering according Micro,
Small & Medium Enterprise (MSME) status to dealers as it will enable them
to avail benefits offered to MSMEs. He said MSMEs comprising manufacturing and
services units need to get registered to avail the benefits and subsidies
offered under various government schemes. Firm trade continued over the Dalal
Street in late afternoon session, taking support from India Ratings and
Research's (Ind-Ra) latest report that the recently announced loan
restructuring guidelines for COVID-19 related stress will provide banks with an
opportunity to keep viable accounts as standard in their books. This is because
a large proportion of assets that otherwise would have slipped to the gross
non-performing assets (GNPA) pool will now be restructured by banks. Some
support also came as GST Network said it has enabled a functionality to help
GST payers know their input tax credit (ITC) eligibility in their Annual
Return, making it more convenient to file GSTR-9. So far, the GST system used
to compute eligible ITC based on suppliers' sales return GSTR-1, but the
break-up at the invoice level was not provided. However, equity markets wiped
out most of the gains in final minutes of trade with Moody's Investors
Service's statement that US-India trade negotiations will continue to be
challenging and are likely to get delayed due to the Covid-19 pandemic.
Finally, the BSE Sensex gained 86.47 points or 0.22% to 38,614.79, while the
CNX Nifty was up by 23.05 points or 0.20% to 11,408.40.
The US markets ended lower on
Wednesday following the release of the minutes of the Federal Reserve's latest
monetary policy meeting. The minutes of the Fed's July meeting noted that the
coronavirus outbreak is causing tremendous human and economic hardship across
the United States and around the world. The Fed noted economic activity and
employment have picked up somewhat in recent months but remain well below their
levels at the beginning of the year. The Fed said the ongoing public health
crisis will weigh heavily on economic activity, employment, and inflation in
the near term, and poses considerable risks to the economic outlook over the
medium term. Meanwhile, Democratic House Speaker Nancy Pelosi said that she would
be willing to reconvene negotiations and consider a compromise on another
coronavirus relief package, after $600 a week in additional unemployment
benefits expired at the end of last month leaving many workers in the lurch. On
the economic data front, the World Trade Organization said global goods trade
likely posted a record fall in the second quarter but a partial uptick in trade
and output are expected in the third quarter. The Goods Trade Barometer, a
real-time gauge of trends in global trade, fell 18.6 point from last year to
84.5 in the second quarter, the lowest on record since the series began in
2007. All of the barometer's component indices remained well below trend, with
many registering historic lows. Indices for automotive products and air freight
were by far the worst on record since 2007. A reading below 100 suggests below
trend growth in global goods trade. The latest score and June statistics
indicated that the volume of merchandise trade this year would contract by 13
percent compared to 2019.
Crude oil futures shook off early
losses to end little higher on Wednesday, finding support after government data
showing a fall in gasoline inventories soothed jitters over demand as a
pandemic-lightened driving season moves into its final stretch. The Energy
Information Administration said U.S. crude inventories last week fell by 1.6
million barrels, while gasoline inventories were down 3.3 million barrels.
Meanwhile, traders were also keeping an eye on a meeting of an OPEC+ panel that
was expected to recommend sticking with the current schedule of production
curbs as major producers gauge the COVID-19 pandemic's affect on the demand
outlook. Crude oil futures for September added 4 cents or 0.1 percent to settle
at $42.93 a barrel on the New York Mercantile Exchange. However, October Brent
crude fell 9 cents or 0.2 percent to settle at $45.37 a barrel on London's
Intercontinental Exchange.
Erasing initial gains, Indian
Rupee ended weaker against dollar on Wednesday, on account of sustained dollar
demand from importers and banks. Traders took note of GST Network's statement
that it has enabled a functionality to help GST payers know their input tax
credit (ITC) eligibility in their Annual Return, making it more convenient to
file GSTR-9. So far, the GST system used to compute eligible ITC based on
suppliers' sales return GSTR-1, but the break-up at the invoice level was not
provided. However, firm domestic equities and sustained foreign fund inflows
capped the losses. On the global front; dollar struggled on Wednesday, holding
a whisker above a 27-month low hit overnight, after a record run for stocks on
Wall Street added to pressure on the currency from simmering trade tensions
between Washington and Beijing. Finally, the rupee ended at 74.82, 6 paise
weaker from its previous close of 74.76 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in equity, while they were net sellers in debt segment. In
equity segment, the gross buying was of Rs 5396 crore against gross selling of
Rs 4344.75 crore, while in the debt segment, the gross purchase was of Rs
658.83 crore with gross sales of Rs 827.22 crore. Besides, in the hybrid
segment, the gross buying was of Rs 26.06 crore against gross selling of Rs
26.42 crore.
The US markets ended in red on
Wednesday after the Federal Reserve in the minutes of its July meeting, raised
concerns that the US economic recovery from the devastating effects of the
pandemic faced a highly uncertain path. Asian markets are trading lower on
Thursday tracking weakness on Wall Street overnight. Indian markets ended
higher on third straight session on Wednesday led by PSU banks. Today, the
markets are likely to make gap-down opening following sell-off in the global
markets. Traders will be concerned as the World Bank said that it is likely to
project a steeper contraction of India's economy than 3.2 per cent it has
forecast for the current financial year due to the increasing number of
Covid-19 cases and the resultant regional lockdowns. It cautioned India against
using its tariff policy to attract the firms wanting to shift from China.
Besides, Care Ratings said India's GDP is likely to contract by 20 per cent
during the first quarter of the current fiscal on account of the COVID-19
pandemic-induced disruptions. Rising coronavirus cases may also dampened
sentiments in the markets. India has recorded its worst single-day spike of
over 69,000 coronavirus cases, taking its total to 2,835,822. With 980
fatalities reported on Wednesday, the country's death toll has surged to
53,994. There will be some cautiousness with Centre of Monitoring Indian
Economy (CMIE) data showing that the unemployment rate in India recorded for
August 18 was 8.20 percent (30-day moving average), against 7.64 percent at the
start of the month on August 1. Meanwhile, the GST Council is likely to meet on
August 27 to discuss the compensation payout to states and the opinion of the
Attorney General on the legality of market borrowing to meet revenue shortfall.
There will be some buzz in the sugar stocks after the Union Cabinet decided to
increase the minimum price sugar mills pay to sugarcane growers, also known as
Fair and Remunerative Price (FRP), by Rs 10 per quintal to Rs 285 for the next
marketing year starting October 2020. Banking stocks will be in focus after
India Ratings and Research said banks are likely to restructure up to Rs 8.4
lakh crore of loans, or 7.7 percent of the overall system's credit, under the
newly announced recast package. There will be some reaction in auto component
industry stocks as industry body ACMA said the auto component industry, which
accounts for around 2.3 per cent of the country's GDP, is looking for
government support in terms of tax rationalisation as it aims to tide over the
challenging business environment.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,408.40
|
11,381.55
|
11,447.80
|
BSE Sensex
|
38,614.79
|
38,514.13
|
38,751.99
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Zee Entertainment
Enterprises
|
1,448.63
|
196.80
|
177.36
|
208.11
|
State Bank of India
|
593.02
|
197.05
|
195.20
|
199.60
|
Tata Motors
|
451.34
|
125.15
|
124.06
|
126.91
|
Gail India
|
368.81
|
101.45
|
98.40
|
103.20
|
ICICI Bank
|
357.91
|
374.45
|
371.29
|
376.74
|
Reliance Industries' subsidiary -- RRVL has acquired equity shares of Vitalic and its subsidiaries for a cash consideration of around Rs 620 crore.
BPCL is planning to commission its new state-of-the-art bottling plant at Madurai, in the state of Tamil Nadu, aimed to serve the southern districts.
TCS has launched TCS Safe Workplace, a return-to-work solution that helps global enterprises quickly transition to a safe, secure and productive work environment.
Dr. Reddy's Laboratories has launched Avigan (Favipiravir) 200 mg Tablets in India.