Indian equity
benchmarks, after swinging between gains and losses, ended flat with negative
bias on Tuesday, amid lack of directional cues from domestic as well as global
markets. Key gauges made an optimistic start and managed to trade above neutral
lines in morning session, as the Reserve Bank of India (RBI) has decided to
extend by six months the enhanced borrowing facility provided to banks to meet
liquidity shortage till March 31, 2021 amid the ongoing economic woes created
by the coronavirus pandemic. Traders also took some solace as the Ministry of
Corporate Affairs has extended the duration of several schemes till 31.12.2020
in view of the continued disruption caused due to the COVID-19 pandemic in
certain parts of the country and to provide greater Ease of Doing Business.
However, volatility struck bourses in late morning session, as ratings agency
ICRA revised its forecast for the contraction in India's FY21 GDP to 11 per
cent from its earlier assessment of 9.5 per cent. The ratings agency cited the
elevated levels of Covid-19 infections at the end of Q2FY21. Domestic investors
also turned cautious as the Reserve Bank has postponed the meeting of the
Monetary Policy Committee (MPC), the all-important interest rate-setting panel,
over a possible lack of quorum as the appointment of independent members is
delayed. Trading sentiments remained in lackluster mood in late afternoon deals
after the World Bank said the coronavirus pandemic is expected to lead to the
slowest growth in more than 50 years in East Asia and the Pacific as well as
China, while up to 38 million people are set to be pushed back into poverty.
The bank said the region this year is projected to grow by only 0.9%, the
lowest rate since 1967. Finally, the BSE Sensex fell 8.41 points or 0.02% to
37,973.22, while the CNX Nifty was down by 5.15 points or 0.05% to 11,222.40.
The US markets
ended lower on Tuesday as investors looked ahead to the first presidential
debate from Donald Trump and Democratic candidate Joe Biden, due to take place
later in the day. Lingering worries about the spread of coronavirus infections
and fears of fresh lockdown measures weighed on the market. Comments by a
couple of Fed officials that the economy might take longer time to recover made
an impact as well on stocks. Investors were also reacting to the latest updates
on a coronavirus relief package. After a near one-hour conversation on Tuesday,
Speaker Nancy Pelosi and US Treasury Secretary Mnuchin made plans to speak
again Wednesday on their effort to deliver trillions of dollars in relief to
struggling Americans just ahead of the November election. After her
conversation with Mnuchin, Pelosi said she's hopeful about clinching a longshot
deal. The House Democrats had released a $2.2 trillion bill for the
coronavirus-relief package on Monday. On the economic data front, US trade
deficit in goods rose 3.5% in August to $82.9 billion, advanced US wholesale
inventories increase 0.5% on that month, while US retail inventories climbed
0.8% last month. Separately, US home prices rose 4.8% in July, up from 4.3% in
the prior period, according to a three-month average reading from
Case-Shiller's national price index, buttressed by superlow mortgage interest
rates.
Crude oil
futures ended deeply in red on Tuesday with Both WTI and Brent futures settling
at their lowest front-month prices since September 15. Investors worried about
rising cases of COVID-19 throughout the globe, a development that may harm
appetite for oil and other energy assets in the longer-term. The global death
toll from the coronavirus pandemic has surpassed one million globally, while
the US accounts for more than a fifth of the nearly 33.4 million cases, with
more than 200,000 deaths. Crude oil futures for November fell $1.31 or 3.2
percent to settle at $39.29 a barrel on the New York Mercantile Exchange.
November Brent crude dropped $1.40 or 3.3 percent to settle at $41.03a barrel
on London's Intercontinental Exchange.
Indian rupee
ended lower against dollar on Tuesday, extending previous session losses, on
emergence of demand for the greenback from importers. Sentiments were fragile
as domestic rating agency ICRA has further revised down its Gross Domestic
Product (GDP) estimate for the country and now expects the Indian economy to
contract by 11 percent in FY21. The agency, which was earlier estimating a
contraction of 9.5 percent, said the revision has been done as the rate of new
COVID-19 infections remains elevated. However, downfall were limited as Reserve
Bank of India (RBI) has decided to extend by six months the enhanced borrowing
facility provided to banks to meet liquidity shortage till March 31, 2021 amid
the ongoing economic woes created by the coronavirus pandemic. On the global
front; dollar edged up on Tuesday, still close to 2-month highs, as markets
awaited the first debate between the U.S. presidential candidates, signs of
progress in U.S. fiscal stimulus talks and economic data, including German
inflation. Finally, the rupee ended at 73.85, 6 paise weaker from its previous
close of 73.79 on Monday.
The FIIs as per
Tuesday's data were net buyers in both equity and debt segment, according to
data released by the NSDL. In equity segment, the gross buying was of Rs
5637.84 crore against gross selling of Rs 5113.59 crore. In the debt segment,
the gross purchase was of Rs 589.60 crore with gross sales of Rs 288.58 crore.
In the hybrid segment, the gross buying was of Rs 9.06 crore against gross
selling of Rs 11.57 crore.
The US markets
ended lower on Tuesday ahead of the first presidential debate before the
November election. Asian markets are trading mostly lower in early deals on
Wednesday following the weak cues overnight from US markets ahead of the first
presidential debate and as investors digested a raft of local economic
data. Indian equity markets ended flat
with a negative bias on Tuesday's trading session. Today, the start of session
is likely to be positive. Traders will be taking some encouragement with an aim
to help state governments tide over the financial problems triggered by the
Covid-19 pandemic, the Reserve Bank of India (RBI) extended by six months the
additional flexibility provided to states to raise funds through market
borrowing and overdraft. The RBI in April provided additional flexibility to
states and Union Territories (UTs) to raise funds to deal with the Covid-19
crisis. The flexibility was available till September 30, 2020. However, there
may be some cautiousness as Nobel Laureate Abhijit Banerjee said India is among
the worst performing economies in the world and the government's economic
stimulus was inadequate to tackle the problem. But, he said that the country
will see a revival in growth in the July-September quarter of the current
fiscal. He said the country's economic growth was slowing down even before the
Covid-19 pandemic hit. Market participants may be concerned as private report
said the steady rise in caseloads and the spillover effects of the strict
lockdown measures will continue to undermine economic growth in the country. It
said the recovery now is expected to be gradual as rising infections pose
constraints. Even if the growth takes the form of a V-shape, the level of Gross
Domestic Product (GDP) will matter. Credit growth has not picked up as
envisaged. Meanwhile, the Securities and Exchange Board of India (Sebi) has
extended the special dispensations given to companies wanting to go public. The
regulator has said the validity of Sebi observations for initial public
offerings (IPOs) expiring between October 1, 2020 and March 31, 2021 will be
extended till March 31, 2021. Chemical stocks will be in focus as Chemicals
& Fertilizers Minister D V Sadananda Gowda said it is a good time to invest
in India's chemical sector that has huge growth potential. The minister said it
is a good time to invest in India when the government is focussing on
self-sufficiency in domestic production. There will be some buzz in metal
stocks as India Ratings and Research (Ind-Ra) has maintained a negative outlook
on the base metals sector for 2HFY21. It said business disruptions led by
Covid-19 are likely to persist over the next six to nine months, as the
pandemic scenario continues to evolve. Also, there will be some buzz in banking
stocks as the RBI deferred the implementation of the capital conservation
buffer (CCB) requiring banks to set aside additional reserves of 0.625 percent
by a further six months due to the COVID-19 pandemic.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE Nifty
|
11,222.40
|
11,167.13
|
11291.53
|
BSE Sensex
|
37,973.22
|
37,791.07
|
38195.66
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
633.67
|
131.95
|
129.77
|
135.07
|
Hindalco
Industries
|
366.25
|
176.60
|
170.70
|
179.90
|
SBIN
|
356.89
|
185.30
|
182.72
|
188.42
|
ITC
|
256.18
|
169.50
|
167.42
|
173.17
|
NTPC
|
213.29
|
85.10
|
83.53
|
87.78
|
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