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NSE Intra-day chart (23 September 2020)
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Market Commentary 24 September 2020
Benchmarks to make gap-down opening amid sell-off in global peers


Extending losses for the fifth straight session, Indian equity benchmarks ended Wednesday's session with minor cuts, as investors remained cautious over spiking virus infections. The benchmarks staged a gap up opening, as India and China agreed to stop sending troops to the front line of their disputed Himalayan border in what appears to be the first step towards resolving the 20-week military standoff along the Line of Actual Control (LAC) in Ladakh. Traders found some solace with ICRA's report that India's current account will swing to a surplus of $30 billion or 1.2 percent of GDP in FY21, due to slowdown in imports during the pandemic, making it clear that it will be a temporary phenomenon. Some support also came as parliament passed amendments to the Banking Regulation Act to bring cooperative banks under the supervision of the RBI, a move aimed at protecting the interest of depositors. However, local indices pared all intra-day gains and slipped into red terrain in afternoon deals, due to profit-booking at higher levels a day ahead of expiry of September derivative contracts. Some anxiety also came as the United Nations Conference on Trade and Development (UNCTAD) projected India's economy to contract 5.9 per cent in 2020, and warned the country to not repeat its past mistake of announcing austerity measures. It forecast the economy to grow 3.9 per cent next year. Though, in the final hour of trading, key gauges managed to cut the losses significantly, as some optimism remained among traders with report that the government aims to catapult India to among the top 10 countries in World Bank's ease of doing business rankings with the comprehensive labour reforms which are likely to be completed after Parliament approves three draft codes in the ongoing session. Finally, the BSE Sensex fell 65.66 points or 0.17% to 37,668.42, while the CNX Nifty was down by 21.80 points or 0.20% to 11,131.85.


The US markets ended deeply in red on Wednesday as market participants struggled to shake off worries about a lack of a coronavirus aid package and rising COVID-19 cases. Concerns about surging coronavirus cases in certain parts of the world have weighed on the markets even as President Donald Trump indicated the US would not follow the UK's lead and implement a second round of lockdowns. The sell-off on markets also came amid renewed weakness among technology stocks, as reflected by the particularly steep drop by the tech-heavy Nasdaq. Big-name tech companies like Netflix, Apple, Amazon and Alphabet all showed significant moves to the downside. On economic front, Federal Reserve Vice Chairman Richard Clarida said that policy makers won't contemplate raising interest rates until inflation is clearly back at 2%-and possibly even beyond. Randal Quarles, the Fed's vice chairman for banking supervision, said he's optimistic about the outlook but also agreed with Fed Chair Powell that continued support will be required to sustain a robust recovery. A September composite purchasing managers index flash reading from IHS slipped to 54.4 in September from 54.6 in the prior month, signaling a slower pace of growth. The flash services purchasing managers index inched down to 54.6 from 55 in August. The flash manufacturing index rose to 53.5 in September from 53.1 in the prior month, still marking a 20-month high.


Crude oil futures ended higher on Wednesday, extending their previous session's gains, as US crude supplies declined for a second week in a row. The Energy Information Administration reported that US crude inventories fell for a second straight week, by 1.6 million barrels for the week ended September 18. That was much less than the average forecast from analysts polled by S&P Global Platts for a decline of 4 million barrels. However, upside remained capped as coronavirus-related lockdowns in Europe raising expectations for weaker energy demand. Crude oil futures for October gained 13 cents or 0.3 percent to settle at $39.93 a barrel on the New York Mercantile Exchange. November Brent crude added 5 cents or 0.1% to settle at $41.77 a barrel on London's Intercontinental Exchange.


Indian rupee ended marginally higher against dollar on Wednesday, on persistent selling of the American currency by exporters. Traders remained positive with Industry body the Confederation of Indian Industry's (CII) statement that the government should extend the export incentive scheme Merchandise Exports from India Scheme (MEIS) till December 31 in its present form to help exporters. The extension will help address the accounting problem of exporters as they can book the receivables under the Merchandise Exports from India Scheme in the current financial year. However, upside remained capped with United Nations Conference on Trade and Development (UNCTAD) stating that the contraction in the Indian economy due to the pandemic-led disruptions may disappear next year, but it can cause some irreversible damage to the economy. On the global front; US dollar rose against major currencies on Wednesday, supported by positive US economic data and concerns about a second wave of coronavirus infections in Europe and Britain. Finally, the rupee ended at 73.57, 1 paise stronger from its previous close of 73.58 on Tuesday.


The FIIs as per Wednesday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 4113.99 crore against gross selling of Rs 5888.78 crore, while in the debt segment, the gross purchase was of Rs 357.31crore with gross sales of Rs 620.72 crore. Besides, in the hybrid segment, the gross buying was of Rs 17.30 crore against gross selling of Rs 18.43 crore.


The US markets ended sharply lower on Wednesday amid renewed weakness among technology stocks, as reflected by the particularly steep drop by the tech-heavy Nasdaq. Asian markets are trading under pressure on Thursday after Fed Chairman Jerome Powell reiterated there's a long way to go for the economic rebound. Indian markets ended lower for the fifth straight session on Wednesday as rising Covid-19 cases at home and fears over more pandemic lockdowns in Europe dented sentiment. Today, the markets are likely to make gap-down opening on the back of weak global cues. Besides, the scheduled expiry of monthly derivatives is likely to keep the session volatile. Rising coronavirus cases to dampen sentiments in the markets. India recorded 89,688 coronavirus cases, taking its total caseload to 5,730,184. India has added over 1,000 deaths every day for 24 days. Prime Minister Narendra Modi chaired a high-level virtual meeting with chief ministers and health ministers of many states. During the meeting he announced that states can spend 50 per cent of the state disaster relief fund (SDRF) amount on efforts to check the spread of Covid-19. Also, there will be some cautiousness with a private report that v-shaped recovery unlikely in India as Covid cases rise. Traders will be concerned with the Department for Promotion of Industry and Internal Trade (DPIIT) data showing that foreign direct investment (FDI) equity inflows into India contracted by 60 per cent to $6.56 billion (Rs 49,820 crore) during April-June 2020. Traders may take note of FICCI President's statement that the economy can be revived only by boosting consumer sentiments, which are weak and need measures like discount vouchers from the government to spur the pending. Though, some support may come later in the day as Commerce and Industry Minister Piyush Goyal said that the government has set up a National Traders' Welfare Board with the objectives of welfare of traders and their employees, simplification of the Acts and rules applicable to traders, reduction of compliance burden and improvement in access to funds. Agriculture stocks will be in focus as the Commission for Agricultural Costs and Prices (CACP) recommended a fertiliser cash subsidy of Rs 5,000 per year to farmers. There will be some reaction in insurance stocks with a private report that non-life insurers have witnessed 3.6 per cent growth in premiums in the first five months of FY21, a signal that the second quarter (Q2) will be better for the industry than Q1 when firms saw a drop in premiums.


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



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Bharti Airtel





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State Bank of India






  • Reliance Industries' telecom arm -- Jio has unveiled postpaid plans, bundling up to 500 GB of data and subscription to Netflix, Amazon Prime and Disney plus Hotstar. 
  • Sun Pharmaceutical Industries' wholly-owned Japanese subsidiary has launched ILUMYA Subcutaneous Injection 100 mg Syringe in Japan. 
  • HDFC Life Insurance Company has entered into a bancassurance partnership with Yes Bank to sell policies to the bank's customers. 
  • Bharti Airtel has picked up a strategic stake in tech startup Waybeo under the Airtel Startup Accelerator Program.
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