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NSE Intra-day chart (21 October 2020)
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Market Commentary 22 October 2020
Markets likely to open in red amid weak global cues


Indian equity benchmarks managed to close higher after witnessing wild swings during the session on Wednesday, owing to buying interest in Realty, Telecom and Metal shares. The benchmarks staged a gap up opening, as traders took encouragement with the Commerce and Industry Ministry's statement that foreign direct investment (FDI) in India has increased by 16 per cent year-on-year to $27.1 billion during April-August this year. During April-August last year, India had received FDI worth $23.35 billion. Additional support came with Ratings agency ICRA's report that India's economic recovery has broadened and strengthened in September 2020 from the pandemic-induced lows seen in April 2020. It said that as many as nine of the tracked 15 non-financial high frequency indicators recorded growth in September 2020, while five posted a narrower year-on-year (YoY) contraction in that month. However, domestic bourses wiped out entire gains in late afternoon deals, as RBI analysis showing that aggregate sales of private sector manufacturing companies recorded a sharp contraction of 41.1 per cent year-on-year in the first quarter of 2020-21, reflecting the impact of the pandemic induced lockdown. Some concern also came with reports that even as brands are betting big on Diwali to light up their sales, a survey has shown below-average spending propensity among urban Indians this festive season with nearly 50 per cent respondents agreeing of being careful about their finances. But, the benchmarks managed to bounce from intraday lows in the last 30 minutes of trade, taking support from the Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest Provisional Estimate of Net Payroll data report has showed that India created 1005852 new jobs in the month of August 2020 as against revised figure of 748784 in July 2020. Finally, the BSE Sensex rose 162.94 points or 0.40% to 40,707.31, while the CNX Nifty was up by 40.85 points or 0.34% to 11,937.65.


The US markets end in red on Wednesday amid a failure to produce any fresh developments on the negotiations to carve out additional fiscal support for American workers and businesses. Private report said that White House officials and House Speaker Nancy Pelosi opened the door to passing a coronavirus relief package after the election, indicating that a long-sought-after catalyst for further gains for equities in 2020, ahead of the 2020 presidential elections in November, may be gone for now. Meanwhile, the rising cases of COVID-19 in the U.S. and Europe, in particular, have led to the potential for more economic shutdowns, which impeded investors' sentiments. However, downside remained capped as Economic activity continued to increase across all Federal Reserve districts, according to the central bank's Beige Book report released. The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the pace of economic growth characterized as slight to modest in most districts. The report said manufacturing activity generally increased at a moderate pace, while residential housing markets continued to experience steady demand for new and existing homes. Banking contacts also cited increased demand for mortgages as the key driver of overall loan demand.


Crude oil futures ended lower on Wednesday, weighed down by concerns over a drop in energy demand after data from Energy Information Administration (EIA) showed smaller than expected drop in oil stockpiles and an increase in gasoline inventories. The EIA reported that US crude inventories fell by 1 million barrels for the week ended October 16. That followed a 3.8 million-barrel decline the week before.  On average, analysts polled by S&P Global Platts forecast a weekly decrease of 1.9 million barrels. The EIA also said Gasoline supply, meanwhile, climbed by 1.9 million barrels, while distillate stockpiles fell by 3.8 million barrels last week. Meanwhile, the rising cases of COVID-19 in the US and Europe, in particular, have led to the potential for more economic shutdowns, which can impede demand for energy. Crude oil futures for December fell $1.67 or 4 percent to settle at $40.03 a barrel on the New York Mercantile Exchange. December Brent crude dropped $1.43 or 3.3 percent to settle at $41.73 a barrel on London's Intercontinental Exchange.


Tumbling for third session in a row; Indian rupee ended lower against dollar on Wednesday, on account of sustained dollar demand from importers and banks. Traders were concerned with Reserve Bank of India's latest analysis showing that the aggregate sales of private sector manufacturing companies recorded a sharp contraction of 41.1 per cent year-on-year in the first quarter of 2020-21 (Q1FY21), reflecting the impact of the pandemic induced lockdown. However, downfall remain capped as Commerce and Industry Ministry has said that foreign direct investment (FDI) in India has increased by 16 percent to $27.1 billion during April-August period of FY21 as compared to $23.35 billion received in same period last year. It noted that the total FDI, which includes reinvested earnings, grew by 13 percent to $35.73 billion. On the global front, pound rose against the U.S. dollar to a one-week high after the European Union's Brexit negotiator said that a new trade deal with Britain was within reach. Finally, the rupee ended at 73.58, 9 paise weaker from its previous close of 73.49 on Tuesday.


The FIIs as per Wednesday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 6521.67 crore against gross selling of Rs 4690.43 crore, while in the debt segment, the gross purchase was of Rs 1367.26 crore with gross sales of Rs 797.71 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.80 crore against gross selling of Rs 15.87 crore.


The US markets closed lower on Wednesday after a volatile trading session, as investors worried whether difficult negotiations in Washington would produce a deal for a fresh U.S. coronavirus stimulus package. Asian markets are trading in red on Thursday after a bumpy overnight session on Wall Street amid fears that agreement on a key U.S. stimulus bill will not be reached until after the presidential election on November 3. Indian markets ended Wednesday's volatile session on a higher note led by gains in metals, realty and financial stocks amid positive global cues. Today, the start of session is likely to be pessimistic on weakness in global markets. Traders will be concerned as the International Monetary Fund slashed this year's economic forecast for Asia, reflecting a sharper-than-expected contraction in countries like India, a sign the coronavirus pandemic continues to take a heavy toll on the region. There will be some cautiousness with a private report that the government expects the fiscal deficit to be close to 7 percent of GDP or thereabouts in the current financial year. The general deficit is unlikely to be lower than 11 percent, with the state government borrowings estimated at 4 percent levels. Meanwhile, India on Wednesday recorded over 56,000 cases, taking the tally to 7,705,158. Death toll rose to 116,653. However, some respite may come later in the day as Reserve Bank Governor Shaktikanta Das said the country is at the doorstep of economic revival on the back of accommodative monetary and fiscal policies being pursued by the central bank and the government. Some support may come as the Reserve Bank announced an on tap Targeted Long-Term Repo Operations (TLTRO) scheme of up to Rs 1 lakh crore to enable banks to provide liquidity support to a host of sectors, including agriculture, retail, drugs and pharmaceuticals and MSMEs. Market participants may take note of Economic Affairs Secretary Tarun Bajaj's statement that the government is open to further stimulus measures to boost the coronavirus-hit economy. Agriculture industry stocks will be in focus as Government-owned FCI and state procurement agencies have bought 106.88 lakh tonnes of paddy so far in the kharif marketing season for Rs 20,180 crore. There will be some reaction in Rubber industry stocks as the commerce ministry recommended for continuation of anti-dumping duty on a Chinese synthetic rubber for five more years with a view to guard domestic players from cheap imports.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Indian Oil Corporation






  • TCS and the University of Tokyo have entered into a strategic partnership to conduct joint academic-industry research. 
  • Larsen & Toubro's construction arm -- L&T construction has secured orders from prestigious clients for its varied businesses. 
  • IOC has raised Rs 2,000 crore through the issuance of 20000, 5.50% Unsecured, Listed, Rated, Taxable, Redeemable, NCDs (Series - XIX) of Rs 10,00,000 each on Private Placement basis. 
  • Axis Bank has offered a host of discounts on various consumer platforms, as well as loans at special rates.
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