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NSE Intra-day chart (18 September 2020)
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Market Commentary 21 September 2020
Benchmarks to make negative start amid mixed Asian cues


Indian equity benchmarks traded in a range bound manner with a positive bias for most part of the day but witnessed sudden fall in final hour of trade which forced to close Friday's session on negative note. Benchmarks made positive start, tracking gains in Asian peers. Sentiments remained positive with report that the Reserve Bank of India (RBI) will purchase government securities under open market operations (OMOs) for an aggregate amount of Rs 10,000 crore on September 24, 2020. Some support also came with data showing that investment in the Indian capital market through participatory notes (P-notes) climbed to over Rs 74,000 crore till August-end, making it the highest level in 10 months. This marks the fifth consecutive monthly rise in the investment through the route, also signaling at growing confidence of foreign portfolio investors (FPIs) in the local market. Though, key indices failed to hold initial gains and entered into a negative territory in last hour of trade amid cooling off buying interest across sectors. Traders turned wary as domestic ratings agency -- ICRA warned that divesting majority stake in state-run lenders by the government will be credit negative for such public sector banks (PSBs). Some concern also came with report that advance tax collections fell 25.5 per cent to Rs 1,59,057 crore in the second quarter of the fiscal. However, markets managed to trim some losses in final minutes of trade, taking support from report that the Employees' State Insurance Corporation (ESIC) subscribers who lost their job due to the COVID-19 situation can claim unemployment relief of 50 per cent of wages under the Atal Bimit Kalyan Yojana. Finally, the BSE Sensex fell 134.03 points or 0.34% to 38,845.82, while the CNX Nifty was down by 11.15 points or 0.10% to 11,504.95.


Extending their previous session's losses, the US markets settled lower on Friday with cut of around a percent each, due to a continued slump by technology stocks, with tech giant Apple showing a significant drop. Shares of Apple, which have been a key driver of the markets in most recent sessions, tumbled by 3.2 percent to their lowest closing level in well over a month. Big-name tech companies like Google parent Alphabet, Amazon, and Microsoft also posted notable losses. Traders also continued to express renewed concerns about the economic outlook following the Federal Reserve's monetary policy announcement on Wednesday. While the Fed indicated it plans to leave interest rates at near-zero levels for years to come, traders seem skeptical that will be enough to support the economy. Recent economic data suggests the rebound from the lockdown-induced economic collapse may be plateauing, raising concerns about the possibility of a double-dip. A report released by the Conference Board showed a continued increase by its reading on leading US economic indicators in the month of August, although the pace of growth slowed compared to recent months. The Conference Board said its leading economic index jumped by 1.2 percent in August after surging up by 2.0 percent in July and spiking by 3.1 percent in June. Street had expected the index to increase by 1.3 percent. Meanwhile, a separate report from the University of Michigan showed a much bigger than expected improvement in consumer sentiment in the month of September.


Crude oil futures ended higher on Friday as prices edged up despite a surge in coronavirus cases raising uncertainty about the pace of economic recovery and causing worries about the outlook for energy demand. However, recent data showing a sharp drop in US crude stockpiles and Organization of the Petroleum Exporting Countries (OPEC) and allies' move to press for better compliance with output cuts supported oil prices. Gaines in oil prices were capped weighed down by an announcement from Libya about lifting of its blockade of oil output for one month. Reports about US oil producers readying rigs in the Gulf of Mexico weighed as well. Crude oil futures for October gained $0.14 or 0.34 percent to settle at $41.11 a barrel on the New York Mercantile Exchange. November Brent crude surged $0.55 to settle at $42.75 a barrel on London's Intercontinental Exchange.


Indian rupee ended substantially stronger against dollar on Friday amid fresh selling of American currency by banks and exporters. Sentiments remained upbeat as investment in the Indian capital market through participatory notes (P-notes) climbed to over Rs 74,000 crore till August-end, making it the highest level in 10 months. This marks the fifth consecutive monthly rise in the investment through the route, also signaling at growing confidence of foreign portfolio investors (FPIs) in the local market. Traders also took note of report that Reserve Bank of India (RBI) will purchase government securities under open market operations (OMOs) for an aggregate amount of Rs 10,000 crore on September 24, 2020.  The securities will be purchased through a multi-security auction using the multiple price method. On the global front; pound edged slightly higher against the euro and the dollar on Friday as data showed that British shoppers continued to increase spending last month, taking sales further above pre-COVID levels. Finally, the rupee ended at 73.45, 21 paise stronger from its previous close of 73.66 on Thursday.


The FIIs as per Friday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 4518.09 crore against gross selling of Rs 4649.34 crore, while in the debt segment, the gross purchase was of Rs 259.12 crore with gross sales of Rs 526.84 crore. Besides, in the hybrid segment, the gross buying was of Rs 142.57 crore against gross selling of Rs 162.68 crore.


The US markets ended lower on Friday as investors continued to dump shares of high-flying tech companies. Asian markets are trading mixed on Monday as investors await the release of China's benchmark lending rate. Indian markets erased day's gains and ended volatile session lower on Friday, dragged by selling in banking and financial stocks. Today, the start of new week is likely to be pessimistic following mixed Asian cues coupled with India-China border tensions. The sixth round of Corps Commander-level talks between the armies of India and China is scheduled to be held today. Traders will be concerned with report that the net direct tax collection during April-August was Rs 1.92 lakh crore, down 31 percent over the same period of the last fiscal. The net indirect tax collection during the five-month period till August fell 11 percent year-on-year to Rs 3.42 lakh crore. Also, rising coronavirus cases may dampen sentiments in the markets. After recording more than 90,000 Covid-19 cases consecutively for five days, India on Sunday witnessed 87,382. The country's tally now stands at 5,485,612, while 87,909 have died from the highly contagious disease so far. Besides, according to the Reserve Bank data, after touching a life-time high in the previous week, the country's foreign exchange reserves declined by $353 million to $541.660 billion in the week ended September 11. However, some respite may come later in the day as the Centre is in consultations with the Russian government for exploring the possibility of cooperation between the two countries for advancing the Covid-19 vaccine in India. some support may also come with CII's business outlook survey's showing that India Inc's business sentiment has improved during July-September quarter as the government gradually unlocked the economy and business activity resumed. Banking stocks will be in focus as Domestic rating agency India Ratings and Research revised its outlook on the country's banking sector to negative for the second half of this fiscal from stable due to the likely increase in stressed assets, credit costs and weak earnings. There will be some reaction in NBFCs stocks with Crisil's report that non-banking financial companies (NBFCs) are likely to see up to 250 basis points (bps) increase in their delinquencies in the current fiscal. Meanwhile, investors will be looking ahead to the two IPOs -- Chemcon Speciality Chemicals and Computer Age Management Services (CAMS) -- opening for subscription today. CAMS' IPO has the price band of Rs 1,229-Rs 1,230 per share while Chemcon Speciality's price band is Rs 305-306 per share. Both will close on Wednesday.


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  • Dr Reddy's Laboratories has settled a litigation with a unit of Bristol Myers Squibb related to patents for Revlimid capsules, used to treat various kinds of cancer. 
  • Coal India's subsidiary -- Central Coalfields is planning to install 80 MWp ground-mounted solar power plant in the ongoing fiscal year. 
  • Hindalco Industries has entered into a MoU with Hindustan Copper for the long-term purchase and sale of copper concentrate produced by the PSU. 
  • ITC has acquired, in the second tranche, 1964 Compulsorily Convertible Preference Shares of Rs 10 each of Delectable Technologies.
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