In a highly volatile day, Indian
equity benchmarks ended higher for second day in row on Monday, on the back of
a broad-based buying interest led by gains in banking, financial services, Oil
& Gas and Metal shares. Positive global cues also boosted investor
sentiment. Markets made an optimistic start and stayed in green for whole day,
as traders got respite with Finance Minister Nirmala Sitharaman's statement
that the government has taken a host of initiatives, including a stimulus
package totalling 10 percent of the country's GDP and major reforms in the
labour sector, to contain the spread of coronavirus disease (covid-19) pandemic
and also to mitigate its social and economic impact. Some support also came
with ICRA Ratings' report that farm sentiments have remained buoyant mainly
driven by healthy monsoon and further optimism of a good kharif crop. It also
said agriculture income is likely to benefit over the medium term aided by increased
government focus on rural income coupled with the recently introduced farm
reforms. However, in afternoon deals, key gauges erased most of their initial
gains, as traders got anxious with report that after six months of severe
stress triggered by the toughest lockdown so far, some high-frequency
indicators point towards economic recovery but there are signs that this
revival is fragile. It estimated that the economy is likely to contract by 13.5
per cent in the second quarter (July-September), and the contraction in FY21
(April 2020 to March 2021) is likely to be around 9.5 per cent unless the
government takes immediate initiative to revive the economy. But, markets
regained upward momentum in late afternoon deals and settled with decent gains,
as optimism remained among traders with the government stating that central
public sector enterprises have cleared payments to the tune of Rs 13,400 crore
owed to micro, small and medium enterprises in the last five months and Rs
3,700 crore was paid to the units in September alone. The micro, small and
medium enterprises (MSME) Ministry this month has written to the top management
of over 2,800 corporates by name to make payment of pending dues of MSMEs.
Finally, the BSE Sensex surged 448.62 points or 1.12% to 40,431.60, while the
CNX Nifty was up by 110.60 points or 0.94% to 11,873.05.
The US markets ended lower on
Monday as investors worried about the prospects of a stimulus package being
completed ahead of the November 3 election. The weakness that emerged on
markets reflected concerns about whether lawmakers in Washington will reach an
agreement on a new stimulus bill. House Speaker Nancy Pelosi's deputy chief of
staff Drew Hammill revealed that the Democratic leader spoke with Treasury
Secretary Steven Mnuchin. Hammill said while there was some encouraging news on
testing, there remains work to do to ensure there is a comprehensive testing
plan that includes contact tracing and additional measures to address the
virus' disproportionate impact on communities of color. Hammill said that there
remains an array of additional differences that must be addressed in a
comprehensive manner in the next 48 hours. On the economic data front,
Homebuilder confidence in the U.S. climbed to another new record high in the
month of October, according to a report released by the National Association of
Home Builders (NAHB). The report said the NAHB/Wells Fargo Housing Market Index
rose to 85 in October from 83 in September. Street had expected the index to
come in unchanged. NAHB Chairman Chuck Fowke said traffic remains high and
record-low interest rates are keeping demand strong as the concept of 'home'
has taken on renewed importance for work, study and other purposes in the Covid
era. However, He added it is becoming increasingly challenging to build
affordable homes as shortages of lots, labor, lumber and other key building
materials are lengthening construction times.
Crude oil futures ended lower on
Monday, weighed down by lingering concerns about energy demand outlook due to
rising coronavirus cases. Several states in America have reportedly seen an
increase in the number of new Covid-19 cases. Italy announced new measures
after the country recorded a record daily increase of the Covid-19 cases for
the fifth day in a row on October 18. Further, increased oil output from Libya
hurt as well. After remaining shut for a few months, Libya has increased its
crude output following easing of a blockade by eastern forces in September. Crude
oil futures for November fell 5 cents or about 0.1 percent to settle at $40.83
a barrel on the New York Mercantile Exchange. December Brent crude declined 31
cents or 0.7 percent to settle at $42.62 a barrel on London's Intercontinental
Exchange.
Indian rupee ended marginally
weaker against the US dollar on Monday, on increased demand for the greenback
from importers and banks. Traders were concerned as Securities and Exchange
Board of India (SEBI) in its latest data has showed that investments through
participatory notes (P-notes) in the Indian capital market dropped to Rs 69,821
crore at September-end. This marks the first decline in investment through the
route since March. However, downfall remain capped with Finance Minister
Nirmala Sitharaman's statement that the government has taken a host of
initiatives, including a stimulus package totalling 10 percent of the country's
GDP and major reforms in the labour sector, to contain the spread of
coronavirus disease (covid-19) pandemic and also to mitigate its social and
economic impact. On the global front, pound held above a 10-day low on Monday
as investors cut their holdings with British and European negotiators
scrambling to salvage post-Brexit trade talks. Finally, the rupee ended at
73.37, 2 paise weaker from its previous close of 73.35 on Friday.
The FIIs as per Monday's data
were net sellers in equity segment, while net buyers in debt segment. In equity
segment, the gross buying was of Rs 4914.87 crore against gross selling of Rs
4923.41 crore, while in the debt segment, the gross purchase was of Rs 2653.27
crore with gross sales of Rs 1451.44 crore. Besides, in the hybrid segment, the
gross buying was of Rs 0.92 crore against gross selling of Rs 13.01 crore.
The US markets settled lower on
Monday as the deadline for US lawmakers to pass an economic stimulus bill
approached. Asian markets are trading in red on Tuesday as investors await the
October fixing of China's benchmark lending rate. Indian markets ended over a
percent higher on Monday, boosted mainly by bank and FMCG stock. Today, the
markets are likely to get negative start following sell-off in the global
peers. There will be some cautiousness with Finance Minister Nirmala
Sitharaman's statement that the government has begun an exercise to assess the
impact of the pandemic on the economy and likely contraction in GDP, even as
she did not rule out the possibility of another stimulus to boost growth.
Though, some respite may come later in the day with a private report that
COVID-19 vaccines will be the fastest vaccine to be ever developed and they
will be available by the summer of 2021. Some support will come with data
released by the Ministry of Statistics and Programme Implementation (MoSPI) in
the quarterly bulletin of the Periodic Labour Force Survey (PLFS) showing that
unemployment in urban areas fell to 8.4% in July- September 2019 from 8.9% in
the June quarter last year. Market participants may take encouragement with
report that India on Monday witnessed a significant drop in the number of new
Covid-19 cases. According to Worldometer, at 46,498, the country registered
fewer daily infections than the US -- for the first time in over a month --
taking its tally to 7,594,736. Traders may take note of report that Finance
Minister Nirmala Sitharaman exhorted large central public sector enterprises
(CPSEs) to achieve by December 75 per cent of their planned capital expenditure
(capex) target for 2020-21, to support economic growth hit by the COVID-19
crisis. There will be some reaction in sugar industry stocks with ISMA's
statement that India needs to export 6 million tonnes (MT) of sugar in 2020/21
marketing year started on October 1 as the production is set to jump on higher
area. Meanwhile, the Rs 518-crore Equitas Small Finance Bank initial public
offer (IPO) will open for subscription on today, October 20, 2020. The company
has fixed a price band of Rs 32-33 per share and the issue will close for
subscription on October 22. 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
|
11,873.05
|
11,829.55
|
11,907.40
|
BSE
Sensex
|
40,431.60
|
40,255.38
|
40,563.64
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
State
Bank of India
|
602.24
|
204.00
|
198.50
|
207.05
|
ICICI
Bank
|
410.73
|
417.10
|
405.91
|
423.51
|
Tata
Motors
|
331.61
|
128.25
|
127.24
|
129.84
|
Axis
Bank
|
281.32
|
492.95
|
480.84
|
500.49
|
Oil
& Natural Gas Corporation
|
259.88
|
69.30
|
67.61
|
70.71
|
Dr. Reddy's Laboratories and RDIF have received approval from the DCGI to conduct an adaptive phase 2/3 human clinical trial for Sputnik V vaccine in India.
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Reliance Industries' telecom arm -- Jio is planning to launch a 5G smartphone for less than Rs 5,000.
Maruti Suzuki India has launched the Swift Limited Edition which will excite customers who aspire for a more stylish, bold and dynamic vehicle.