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NSE Intra-day chart (21 September 2020)
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Market Commentary 22 September 2020
Benchmarks to get cautious start amid sell-off in global peers


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)



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Tata Motors





State Bank of India





Zee Entertainment Enterprises










Hindalco Industries






  • HCL Technologies is aiming to acquire DWS, a leading Australian IT, business and management consulting group. 
  • TCS has declared the general availability of its award-winning Quartz suite of blockchain based solutions on Microsoft Azure Blockchain Service. 
  • IOC is reviewing all its greenfield expansion projects in the refining segment. 
  • L&T has declared 100% completion & readiness for commissioning of the 99-MW Singoli-Bhatwari Hydroelectric Power Plant.
News Analysis