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NSE Intra-day chart (21 August 2020)
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Market Commentary 24 August 2020
Markets likely to get optimistic start on Monday


Indian equity markets ended the range bound trade in green terrain on Friday, buoyed by power and realty stocks amid positive cues from global peers. Sensex and Nifty closed above their crucial 38,400 and 11,350 levels, respectively. Indian indices had a strong opening, as traders took encouragement with a private report that Russia is looking for a partnership with India for producing the Covid-19 vaccine Sputnik V. Russian Direct Investment Fund (RDIF) is likely to do phase 3 clinical trials in Russia, UAE, Saudi Arabia, Brazil and Philippines. Some optimism also came in with another private report that India's rural economy swung to growth in June after eight months of contraction. Markets continued to trade higher in late afternoon session, taking support from latest payroll data showing that net new enrolments with retirement fund body EPFO rose to 6.55 lakh in June from 1.72 lakh during May 2020, providing a perspective on employment in the formal sector amid the COVID-19 crisis. Provisional payroll data released by the EPFO last month had shown that net new enrolments stood at 3.18 lakh in May this year. The figure has now been revised to 1,72,174. However, in the final minutes of trading session, key gauges pared some of their morning gains, as investors reacted to the minutes of the Reserve Bank of India's August monetary policy meeting which showed that outlook for the domestic economy remains extremely uncertain. The MPC, however, said that the worst is almost surely behind us in terms of output losses. Finally, the BSE Sensex rose 214.33 points or 0.56% to 38,434.72, while the CNX Nifty was up by 59.40 points or 0.53% to 11,371.60.


The US markets ended higher on Friday following the release of a report from IHS Markit showing US business activity expanded at the fastest pace in over a year in the month of August. The IHS Markit flash composite index of purchasing managers at manufacturers and service providers climbed to an eighteen-month high of 54.7 in August from 50.3 in July. The increase by the index came as the IHS Markit reading on manufacturing activity reached a nineteen-month high, while the reading on service sector activity indicated growth for the first time since January. Besides, housing stocks showed a strong move to the upside following the existing home sales data, driving the Philadelphia Housing Sector Index up by 1.6 percent. Adding to the positive sentiment, the National Association of Realtors (NAR) released a report showing existing home sales in the US continued to soar in the month of July. NAR said existing home sales skyrocketed by a record 24.7 percent to an annual rate of 5.86 million in July after spiking by 20.2 percent to a revised rate of 4.70 million in June. Street had expected existing home sales to jump by 14.0 percent to an annual rate of 5.38 million from the 4.72 million originally reported for the previous month.


Crude oil futures ended lower on Friday as the latest Euro zone flash PMI (purchasing managers' index) readings for August dented hopes of a V-shaped recovery from the bloc's deepest economic downturn on record. Geopolitical tensions also remain in focus after the Trump administration reportedly declined to acknowledge any plans to meet with China over the Phase 1 trade deal. Meanwhile, government data showed India's crude oil imports fell in July to their lowest since March 2010 as fuel demand slowed amid renewed coronavirus-induced lockdowns and closures of refinery units for maintenance. Crude oil futures for September fell 30 cents or 0.7 percent to settle at $42.52 a barrel on the New York Mercantile Exchange. October Brent crude declined 32 cents or 0.7 percent to settle at $44.58 a barrel on London's Intercontinental Exchange.


Indian rupee ended stronger against dollar on Friday due to fresh selling of the American currency by banks and exporters. The domestic currency was trading strong from the start, on back of positive equity markets. Sentiments perked up with report that foreign investors pumped in nearly $4 billion in Indian equities in the three months ended June on attractive valuations, lifting of lockdown curbs and the government's efforts to kick start economic activity. On the global front; pound rose to a 1-1/2-month high on Friday versus the euro and inched towards an eight-month high against the greenback after UK retail sales numbers for July came in much higher than expected. Finally, the rupee ended at 74.84, 18 paise stronger from its previous close of 75.02 on Thursday.


The FIIs as per Friday's data were net sellers in both equity segment and debt segment. In equity segment, the gross buying was of Rs 4819.68 crore against gross selling of Rs 4980.96 crore, while in the debt segment, the gross purchase was of Rs 617.81 crore with gross sales of Rs 1731.44 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.83 crore against gross selling of Rs 10.41 crore.


The US markets ended in green on Friday lifted by strong US economic data. Asian markets are trading mostly higher on Monday with marginal gains on jitters over heady valuations though sentiment was underpinned by coronavirus hopes after the USFDA authorised the use of blood plasma from recovered patients as a treatment option. Indian markets ended higher Friday led by gains in financial and FMCG stocks amid positive momentum in the global markets. Today, the start of new week is likely to be optimistic following Asian peers. Some support will come with report that Department for Promotion of Industry and Internal Trade (DPIIT) said that RoDTEP scheme (Remission of Duties or Taxes on Export Product (RoDTEP) will make India's exports viable and more competitive. Traders may take note of Chief Economic Adviser K V Subramanian's statement that India needs more global sized banks to help the country achieve $5 trillion economy by 2024-25. Though, there may be some cautiousness as India recorded 61,749 coronavirus cases in the past 24 hours, taking its total to 3,105,185. With 846 fatalities reported on Sunday, the country's death toll has surged to 57,691. Also, after rising for the past few weeks, the country's foreign exchange reserves declined by $2.939 billion to $535.252 billion for the week ended August 14, RBI data showed on August 21. There will be some buzz in the agriculture stocks with the agriculture ministry's statement that total area under coverage so far during this kharif (summer sown) season has risen 9 percent to 1,062.93 lakh hectares on better monsoon. The banking stocks will be in focus as Moody's report said that India's state-run banks may need Rs 1.90 to 2.10 lakh crore of external capital over the next two years to restore their loss-absorbing buffers due to the COVID-19 hit. There will be some reaction in sugar stocks with Crisil's report that sugar offtake is likely to remain flat in the current sugar season (October 2019-September 2020) despite the COVID-19 disruptions as buoyant exports are expected to make up for the shortfall in domestic consumption.


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  • Wipro has successfully implemented a blockchain-based ssLNG trading/fulfillment platform for Uniper Global Commodities SE and Liqvis GmbH. 
  • Axis Bank is planning to employ nearly 1,000 people under its new hiring initiative Gig-a-Opportunities from anywhere in the country. 
  • GAIL (India) is expecting its gas demand returning to pre-COVID-19 levels by the end of Q2 of 2020-21 as the expansion of the city gas network will offset shrinking consumption. 
  • ICICI Bank has acquired further stake in India International Exchange.
News Analysis