Falling for third session in a
row, Indian equity benchmarks registered sharp losses of over two percent on
Monday, on account of heavy selling in front line blue chip counters. Markets
made flat-to-positive start, as traders took some support with CII's business
outlook survey showing that India Inc's business sentiment has improved during
July-September quarter as the government gradually unlocked the economy and
business activity resumed. Some support also came with Commerce and Industry
Minister Piyush Goyal's statement that several multinational firms in sectors
such as electronics, retail, e-commerce, and automotive, among others, have
shown interest in shifting their base to India. He also said the government is
working hard to institutionalize more investor friendly reforms to support and
facilitate investments into India. After that, key gauges struggled to find
direction and traded near neutral lines, as surging domestic cases of the novel
coronavirus and sluggish trade across Asian equities kept investors cautious.
Frontline indices came under heavy selling pressure in late afternoon session
and ended near day's low, as traders got anxious with after Reserve Bank of
India's data has showed that country's foreign exchange reserves declined by
$353 million to $541.660 billion in the week ended September 11. During the
reporting week, the fall in reserves was due to a decline in foreign currency
assets (FCAs), a major component of the overall reserves. Investor sentiment
also took a hit after a report released by the Finance Ministry stated that
India's total external debt increased by 2.8 percent to $558.5 billion at the
end of March mainly on account of a rise in commercial borrowings. The external
debt stood at $543 billion at end-March 2019. Traders overlooked report that
the COVID-19 pandemic has provided a unique opportunity to both India and Japan
to further strengthen economic ties by enhancing cooperation in areas like
software development, modern technology, infrastructure and manufacturing.
Finally, the BSE Sensex fell 811.68 points or 2.09% to 38,034.14, while the CNX
Nifty was down by 254.40 points or 2.21% to 11,250.55.
The US markets ended lower on
Monday but regained substantial portion of lost ground in the final hour and
the tech-laden Nasdaq very nearly managed to move into positive territory
towards the closing minutes of the session. Rising worries about surging
coronavirus cases in several countries across Europe and reports that British
Prime Minister Boris Johnson is considering another national lockdown to act as
a circuit-breaker to stop the spread of the virus sent stock prices crashing.
In addition to coronavirus news, the death of Supreme Court Justice Ruth Bader
Ginsburg also appeared to be weighing on the markets as it is feared a fight
over the nomination of her replacement could lead to further delays in the
passage of another coronavirus relief bill. On the economic data front, the
Chicago Fed's national activity index, which is designed to gauge overall US
economic activity, fell to 0.79 in August from a revised 2.54 in the prior
month. The Federal Reserve reported that the debt burden on the US economy rose
at a record pace in the second quarter, with the share of federal government
debt soaring 58.9% to $22.58 trillion, as Washington ramped up is response to
the pandemic.
Crude oil futures ended deeply in
red on Monday, on expectations Libyan crude will soon return to the market,
while worries over a rise in European COVID-19 cases and a global equity market
selloff added to the negative tone. Private reports said that Libyan military
commander Khalifa Haftar, who controls the eastern portion of the country,
would lift an eight-month blockade on crude exports that has virtually shut
down production contributed to the weaker tone. The World Health Organization
has warned that weekly Covid-19 infections in Europe now are higher than the
continent's first coronavirus peak in March. Crude oil futures for October fell
$1.80 or 4.4 percent to settle at $39.31 a barrel on the New York Mercantile
Exchange. November Brent crude dropped $1.71 or 4% to settle at $41.44 a barrel
on London's Intercontinental Exchange.
Continuing prevision session's
gains, Indian rupee ended higher against dollar on Monday due to fresh selling
of the American currency by banks and exporters. Rupee got support with
Confederation of Indian Industry's (CII) business outlook survey showing that
the India Inc's business sentiment has improved during July-September quarter.
The latest CII Business Confidence Index has surged to the level of 50.3 in
July-September 2020, bouncing back from its lowest reading of 41.0 recorded in
April-June 2020. On the global front; pound was under pressure on Monday as
rising COVID-19 cases prompted Britain to consider a second national lockdown.
British Prime Minister Boris Johnson was pondering a second lockdown with new
COVID-19 cases rising by at least 6,000 per day in Britain, hospital admissions
doubling every eight days, and the testing system buckling. Finally, the rupee
ended at 73.38, 07 paise stronger from its previous close of 73.45 on Friday.
The FIIs as per Monday's data
were net buyer in both equity and debt segment. In equity segment, the gross
buying was of Rs 19602.99 crore against gross selling of Rs 17779.05 crore,
while in the debt segment, the gross purchase was of Rs 570.43 crore with gross
sales of Rs 229.89 crore. Besides, in the hybrid segment, the gross buying was
of Rs 59.88 crore against gross selling of Rs 109.98 crore.
The US markets settled in red on
Monday as concerns about new lockdowns in Europe and possible delays in fresh
stimulus from Congress raised fears the U.S. economy faces a longer road to
recovery than previously hoped for. Asian markets are trading lower on Tuesday
following weakness on Wall Street. Indian markets ended lower with cut of over
2 percent on Monday mirroring sell-off in global markets on rising coronavirus
cases across the globe. Today, the markets are likely to make cautious start
tracking sell-off in the global peers. There will be some cautiousness with
CARE Ratings' a multi-sector survey showed that business activity is unlikely
to touch pre-COVID-19 levels before March 2021, and there is a need for the
government to step in and give a push to the economy as it has not done enough
till now. Though, some support may come later in the day with Commerce Minister
Piyush Goyal's statement that the current crisis should be used as an
opportunity to make the transition to clean energy smoother, faster, more
resilient and affordable. Traders may take note of former Niti Aayog vice
chairman Arvind Panagariya's statement that India will need fiscal stimulus,
lower interest rates, faster bank recapitalisation and privatisation of some
PSUs to return to 7 per cent growth rate. Besides, India's imports from China
declined by 27.63 per cent during April-August this fiscal to $21.58 billion
over the same period previous year. Meanwhile, markets regulator SEBI has permitted
foreign portfolio investors (FPI) to write off shares of all the companies
which they are unable to sell. There will be buzz in the metal stocks with
CRISIL Research's statement that Indian steelmakers have turned net exporters
to China during April-August for the first time in several years, owing to weak
domestic demand due to COVID-19 pandemic. Auto stocks will be in focus as
ratings agency ICRA said domestic penetration of electric vehicles (EV) will
remain low in the medium-term in segments like passenger vehicles and
commercial vehicles due to high prices and lack of financial incentives from
the government. There will be some reaction in cement industry stocks with
India Ratings and Research's (Ind-Ra) report that cement demand is expected to
decline by 10 to 15 per cent year-on-year in the second quarter (July to
September).
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,250.55
|
11,134.29
|
11,451.04
|
BSE Sensex
|
38,034.14
|
37,651.52
|
38,703.75
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
647.35
|
137.45
|
132.71
|
144.96
|
State Bank of India
|
576.15
|
185.80
|
182.20
|
191.45
|
Zee Entertainment
Enterprises
|
298.29
|
210.70
|
201.76
|
222.21
|
ICICI Bank
|
289.33
|
350.70
|
343.66
|
362.56
|
Hindalco Industries
|
261.63
|
167.15
|
159.94
|
177.54
|
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