Indian equity benchmarks erased
most of their intraday gains but somehow managed to end the session marginally
in green on Tuesday, tracking positive global markets amid enthusiasm on the
recovery from Covid-19. Benchmarks made positive start, as traders got
encouragement with a private report that the phase 2 human clinical trial of
the Oxford COVID-19 vaccine candidate by Pune-based Serum Institute of India
(SII) is set to begin from Tuesday. The observer-blind, randomised controlled
study to determine the safety and immunogenicity of Covishield on healthy
Indian adults will begin at Bharati Vidyapeeth Medical College and Hospital in
Pune. Some optimism also came as ratings agency Crisil said it expects India's
retail food inflation, measured through the Consumer Price Index (CPI), to ease
in the second half of this financial year owing to the effect of high base of
previous year coupled with a bumper rabi harvest and good prospect of kharif
harvest. However, volatility hit the bourses in late morning trade as key
indices oscillated between the positive and negative territory, as traders got
anxious with a report by State Bank of India (SBI) stating that states are
likely to face uncovered losses of up to Rs 3.1 lakh crore in the current
financial year due to massive disruption caused by COVID-19 pandemic. Some
pessimism also came with a private report stated that amid uncertain business
environment and liquidity pressure arising due to the coronavirus crisis,
merger and acquisition (M&A) deals will continue to see deferral or
cancellation in the short term as buyers assess the impact of the lockdown. A
significant number of M&A deals were either deferred or canceled between
April and July, as the nationwide lockdown imposed to curb the spread of the
deadly coronavirus, negatively impacted the economic activities and businesses.
Finally, the BSE Sensex rose 44.80 points or 0.12% to 38,843.88, while the CNX
Nifty was up by 5.80 points or 0.05% to 11,472.25.
The US markets ended mostly
higher on Tuesday pushing the S&P 500 and Nasdaq indexes to another round
of record highs, as investors took some comfort from progress on US-China trade
talks. However, the drop by the Dow Jones came as Exxon Mobil, Raytheon and
Pfizer moved notably lower following news they are being removed from the blue
chip index. The three stocks will be replaced by Salesforce.com, Honeywell, and
Amgen, which posted strong gains on the day. The changes to the Dow components
come as Apple's upcoming 4-for-1 stock split will reduce the index's weight in
the information technology sector. Meanwhile, traders were also looking ahead
to Federal Reserve Chair Jerome Powell's speech to the Jackson Hole symposium
on Thursday. On the economic data front, reflecting a significant deterioration
in consumers' assessment of current conditions, the Conference Board released a
report showing US consumer confidence unexpectedly declined for the second
straight month in August. The Conference Board said its consumer confidence
index slumped to 84.8 in August after tumbling to a downwardly revised 91.7 in
July. The continued decrease came as a surprise to participants, who had
expected the index to inch up to 93.0 from the 92.6 originally reported for the
previous month. Besides, New home sales in the U.S. saw another substantial
increase in the month of July, according to a report released by the Commerce
Department. The report said new home sales spiked by 13.9 percent to an annual
rate of 901,000 in July after soaring by 15.1 percent to a rate of 791,000 in
June. Street had expected new home sales to climb by 1.2 percent to a rate of
785,000 from the 776,000 originally reported for the previous month.
Crude oil futures ended higher on
Tuesday as storms forced the shutdown of more than 80% of offshore crude-oil
production in the Gulf of Mexico and prompted refinery cuts. Tropical Storm
Marco made landfall Monday and was downgraded to a post-tropical cyclone
Tuesday morning. Attention is focused on Laura, which was upgraded to a
hurricane Tuesday morning and is expected to make landfall on the US Gulf Coast
later this week. On the coronavirus front, the World Health Organization (WHO)
said that the Covid-19 pandemic is still expanding, but the rise in cases and
deaths has slowed globally, except for Southeast Asia and the eastern
Mediterranean regions. Crude oil futures for October rose 73 cents or 1.7
percent to settle at $43.35 a barrel on the New York Mercantile Exchange.
October Brent crude gained 73 cents or 1.6 percent to settle at $45.86 a barrel
on London's Intercontinental Exchange.
Indian rupee ended tad lower
against dollar on Tuesday, on account of dollar demand from importers and
banks. However, downfall remained capped as ratings agency Crisil expects
India's retail food inflation, measured through the Consumer Price Index (CPI),
to ease in the second half of this financial year. It added that the key risk
to this forecast remains the rate of spread of Covid-19 in rural areas, which
may adversely impact the harvest and the supply chain, pushing up retail food
prices. Meanwhile, the government is considering a proposal to permit foreign direct
investment (FDI) in limited liability partnership firms engaged in construction
development. On the global market, dollar fell and the Australian dollar and
Chinese yuan rose after the United States and China both hailed a phone call
between their senior trade officials as a success. Finally, the rupee ended at
74.33, 1 paise weaker from its previous close of 74.32 on Monday.
The FIIs as per Tuesday's data
were net buyers in both equity segment and debt segment. In equity segment, the
gross buying was of Rs 5309.29 crore against gross selling of Rs 4247.05 crore,
while in the debt segment, the gross purchase was of Rs 1600.08 crore with
gross sales of Rs 1469.75 crore. Besides, in the hybrid segment, the gross
buying was of Rs 4.65 crore against gross selling of Rs 11.34 crore.
The US markets ended mostly
higher on Tuesday ahead to Federal Reserve Chair Jerome Powell's speech to the
Jackson Hole symposium on Thursday. Asian markets are trading mixed on
Wednesday after major indexes on Wall Street notched new records yet again
overnight. Indian markets gave up most of their early gains and ended slightly
higher on Tuesday in spite of positive global cues following impressive German
data, positive news on the coronavirus front and signs of progress in
U.S.-China trade negotiations. Today, the start of session is likely to be
flat-to-positive following overnight gains on Wall Street. Traders will be
getting some encouragement as Moody's Investors Service said India, China and
Indonesia will be the only G-20 emerging economies to post a strong enough pick
up of real GDP in the second half of 2020, and retained its projection of 3.1
per cent growth contraction for India in 2020. Some support will also come with
Finance Minister Nirmala Sitharaman's statement that the government is open to
further tweaking the Rs 3 lakh crore credit guarantee scheme for providing
collateral-free loans to small businesses. Traders may take note of report that
India's confirmed case tally is over 3.1 million now, with 22.2 per cent cases
still active. Recovery rate has now risen to over 75 per cent, with over 2.4
million successfully cured. Meanwhile, the Finance Ministry said banks have
sanctioned loans of about Rs 1,55,995 crore under the Rs 3-trillion Emergency
Credit Line Guarantee Scheme (ECLGS) for the MSME sector reeling under the
slowdown caused by the coronavirus pandemic. Though, traders may be concerned
as the Reserve Bank of India (RBI) in its annual report for 2019-20 said that
the Country's headline inflation is expected to firm up further in the coming
months largely due to disruptions in food and manufactured items' supply
chains. There may be some cautiousness with rating agency ICRA's report that
the economy is expected to contract by 25 per cent each in the first quarter of
FY'21 both in terms of GDP ( gross domestic product) as well GVA (gross value
added). Banking stocks will be in focus with a private report that even though
the unlock phases have kick started economic activities in various sectors,
most banks believe that meaningful credit growth recovery is likely only after
18 months, while near-term uncertainty on asset quality remains. There will be
some reaction in metal stocks with worldsteel's report that India's crude steel
output fell 24.6 percent to 7.150 million tonnes (MT) during July 2020. Agriculture
industry stocks will also be in limelight as the RBI flagged concerns about
impact of climate change, in terms of volatile rainfall intensity, increase in
extreme events and rising temperature, having implications for India's
agriculture outlook.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,472.25
|
11,421.76
|
11,524.31
|
BSE Sensex
|
38,843.88
|
38,679.67
|
39,008.89
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
1,053.97
|
207.95
|
204.29
|
210.04
|
Tata Motors
|
902.67
|
127.10
|
122.69
|
129.94
|
ICICI Bank
|
530.73
|
386.35
|
381.90
|
390.30
|
NTPC
|
509.46
|
103.80
|
102.20
|
106.40
|
Zee Entertainment
Enterprises
|
322.96
|
199.95
|
196.96
|
203.71
|
Wipro has entered into partnership with industry-leading Standard Initial Margin Model vendor, Quaternion Risk Management.
Tech Mahindra has collaborated with the Niti Aayog's WEP to support women entrepreneurs across the country.
Kotak Mahindra Bank has launched Cardless Cash Withdrawal Facility through ATMs.
Dr. Reddy's Laboratories has forayed into hospital nutrition segment in the country with the launch of a new nutrition drink for people suffering with critical illnesses.