Daily Newsletter
NSE Intra-day chart (22 July 2020)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 23 July 2020
Markets to get cautious start amid mixed Asian cues

 

Snapping their five-day winning streak, Indian equity benchmarks ended Wednesday's choppy session marginally in red amid selling in IT, Auto and Capital Goods stocks. Weak global markets owing to US-China tensions and a surge in coronavirus cases too dented the investor sentiment. Key indices made slightly positive start but soon turned cautious with a private report stated that economic activity continues to remain weak and will lead to a 6.1 percent contraction in India's GDP in the current fiscal. However, key indices erased all morning losses and managed to trade in green in afternoon session, as Finance Minister Nirmala Sitharaman has assured the industry that the government is open to taking more actions in future to boost economic recovery. She said that the Rs 20.97 lakh crore stimulus package announced by the government to fight the economic impact of COVID-19 pandemic was having a positive impact on the ground on various sectors including on MSMEs. Some support also came with Union Minister Nitin Gadkari terming India as the best destination for foreign investment with high returns and urged investors including from the US to reap rich dividends by investing in its infrastructure, MSMEs, banks, NBFCs and other areas. But, buying proved short lived as markets fell once again in late afternoon session, as some anxiety remained among traders, with External Affairs Minister S Jaishankar's statement that India had to struggle mightily to gain influence in a domain that could have come more easily earlier as its foreign policy carries 'three major burdens' from its past -- Partition, delayed economic reforms and prolonged exercise of the nuclear option. On the global front, Asian markets ended mostly lower on Wednesday after U.S. President Donald Trump warned the U.S. coronavirus crisis will probably worsen before improving. Besides, the latest survey from Jibun Bank revealed that the manufacturing sector in Japan continued to contract in July, albeit at a slightly slower pace, with a manufacturing PMI score of 42.6, up from 40.1 in June. Individually, production and new orders continued to fall at substantial rates, albeit slower than in June. The rate of decline in employment accelerated further and was marked overall. European markets were trading lower, as the initial euphoria over an agreement on EU stimulus package faded and the focus shifted back to surging coronavirus cases around the world. Brexit deal talks and rising U.S.-China tensions also remain on investors' radar. Finally, the BSE Sensex fell 58.81 points or 0.16% to 37,871.52, while the CNX Nifty was down by 29.65 points or 0.27% to 11,132.60.

 

The US markets ended higher on Wednesday as traders remain optimistic about the economic outlook despite the recent surge in new coronavirus cases. Adding to the optimism, the National Association of Realtors (NAR) released a report showing existing home sales rebounded at a record pace in June after three straight months of declines. NAR said existing home sales spiked by 20.7 percent to an annual rate of 4.72 million in June after plunging by 9.7 percent to a rate of 3.91 million in May. Street had expected sales to skyrocket by about 24.5 percent. NAR's chief economist Lawrence Yun said the sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown. He added this revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue. However, buying interest was subdued as traders worried about rising tensions between the US and China after the US asked Beijing to close its diplomatic consulate in Houston within the next 72 hours. Chinese foreign ministry spokesperson Wang Wenbin condemned the action and warned of retaliation if the U.S. does not reverse its decision.

 

Crude oil futures ended marginally lower on Wednesday pressured by an unexpected weekly climb in US crude stockpiles. The Energy Information Administration reported that US crude inventories rose by 4.9 million barrels for the week ended July 17. That compared with an average forecast by S&P Global Platts for a decline of 1.9 million barrels. The American Petroleum Institute on Tuesday reported a climb of 7.5 million barrels. Further, rising tensions between the US and China raised the potential for a decline in energy demand. Crude oil futures for September declined 2 cents or 0.05 percent to settle at $41.90 a barrel on the New York Mercantile Exchange. September Brent crude lost 3 cents or 0.07 percent to settle at $44.29 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended weaker against the US dollar on Wednesday, on increased demand for the greenback from importers and banks. Investors remain concerned with private report stating that economic activity continues to remain weak and will lead to a 6.1 percent contraction in India's GDP in the current fiscal. Besides, rising coronavirus cases in the country also dampened the sentiments. India has recorded more than 39,000 coronavirus cases in the past 24 hours, taking its total to 1,194,085. The country's death toll has now risen to 28,770. On the global front; dollar nursed losses against most currencies on Wednesday, undermined by concern that Republicans and Democrats are struggling to reach consensus on the next round of U.S. economic stimulus measures. Finally, the rupee ended at 74.75, 1 paise weaker from its previous close of 74.74 on Tuesday.

 

The FIIs as per Wednesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 8031.92 crore against gross selling of Rs 5941.71 crore, while in the debt segment, the gross purchase was of Rs 212.85 crore with gross sales of Rs 2023.54 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.09 crore against gross selling of Rs 11.26 crore.

 

The US markets ended in green on Wednesday as traders remain optimistic about the economic outlook despite the recent surge in new coronavirus cases. Asian markets are trading mixed on Thursday as investors weighed between fresh diplomatic tensions between the US and China as well as the boost to Wall Street from US stimulus hopes. Indian markets snapped five sessions of gains and ended lower with minor cuts on Wednesday dragged by auto, IT and FMCG stocks. Today, the start of session is likely to be cautious amid mixed Asian cues coupled with rising coronavirus cases in the country. India witnessed a huge spike of over 45,000 in the count of new coronavirus cases in the past 24 hours, taking its tally to 1,239,684. Record 1,120 people succumbed to the fatal disease. With this, India's Covid-19 death toll rose to 29,890. Traders will be concerned as US Ambassador to India Kenneth Juster has flagged concerns about India's policy environment and micro-management of the economy. Juster said for India to become a part of the global supply chain, first you need a stable & predictable regulatory environment, a lighter touch on regulations and you need to unleash and not micromanage economic growth. There will be some reaction as a private report forecast deeper distress for the country which will lead to a 6 per cent growth contraction in FY21, citing the yet to be stabilised infection curve and the COVID-19 caseload in economically key states. However, some respite may come later in the day as calling for more investment in India, Prime Minister Narendra Modi said India is emerging as a land of opportunities. He added that stronger domestic economic capacities can ensure global resilience against external shocks. Some support may also come as pushing for a relaxation in fiscal norms governing the finances of the states, NK Singh, chairman of the 15th Finance Commission, said states needed greater fiscal space to meet their expenditure obligations. There will be some buzz in the pharma stocks as in a bid to boost domestic manufacturing and reduce import dependence, the department of pharmaceuticals notified two key policies -- Production Linked Incentive (PLI) scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/ drug intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) and scheme for promotion of bulk drug parks. Telcom stocks will be in focus with the Department of Telecom (DoT) order that telecom operators will now have to provide the location grid of the premises of bulk subscribers during physical verification for issuing new connections. Meanwhile, Specialty chemical company Rossari Biotech will get listed at the bourses today. The public issue, which consists of a fresh issue of Rs 50 crore and an offer for sale of 1.05 crore shares by promoters, saw a massive subscription of 79.37 times backed by QIB and non-institutional investors. There will be some earnings announcements too to keep the markets buzzing.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,132.60

11,046.73

11,228.28

BSE Sensex

37,871.52

37,582.34

38,179.99

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

 

Support  (Rs)

 

Resistance (Rs)

 

(in Lacs)

Axis Bank

896.12

478.95

464.50

489.00

State Bank of India

622.77

192.00

189.15

195.80

Tata Motors

507.41

105.15

103.02

108.52

Vedanta

505.81

112.10

108.57

116.77

ICICI Bank

455.01

381.10

374.43

388.63

 

  • Adani Ports and Special Economic Zone has signed up for the Science Based Targets initiative. 
  • Axis Bank has reported 12.83% fall in its consolidated net profit at Rs 1099.52 crore for Q1FY21 as against Rs 1261.40 crore for Q1FY20. 
  • Bajaj Finserv has reported 43.75% rise in its consolidated net profit attributable to owners at Rs 1215.15 crore for Q1FY21 as against Rs 845.34 crore for Q1FY20. 
  • HUL is expecting a couple of turbulent quarters going forward and the firm's objective would be to navigate it in the most agile manner.
News Analysis