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NSE Intra-day chart (02 November 2020)
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Market Commentary 03 November 2020
Markets to get optimistic start amid firm global cues


In a volatile session, Indian equity benchmarks managed to settle higher on Monday, led by buying interest in banking shares after ICICI Bank and IndusInd Bank reported strong September quarter earnings. Key gauges made optimistic start, as traders took some support with Ficci President Sangita Reddy's statement that India's strategy of dealing with the COVID-19 crisis has paid off and the country's economy is set to bounce back and emerge stronger. She said it was time to take bold actions and push the growth agenda vigorously. But, markets soon slipped in red territory, as traders got anxious with a private report that the pandemic-induced growth contraction and additional spending to support the needy amounting to a little over 2 percent of the economy are likely to push the combined fiscal deficit to 13 percent of GDP this fiscal - nearly double of the past year. However, in late hour of trading session, domestic bourses gave up all the losses and ended with minor gains, taking support from the Ministry of Finance's statement the Goods and Services Tax (GST) revenue collections for the month of October 2020 were Rs 1,05,155 crore, which is 10 percent higher than October 2019. This made it the first time monthly revenues crossed the Rs 1 lakh crore mark in FY21. Some support also came as India's manufacturing sector activity improved for the third straight month in October with companies raising output to the greatest extent in 13 years amid robust sales growth. The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) rose from 56.8 in September to 58.9 in October, and pointed to the strongest improvement in the health of the sector in over a decade. Finally, the BSE Sensex rose 143.51 points or 0.36% to 39,757.58, while the CNX Nifty was up by 26.75 points or 0.23% to 11,669.15.


The US markets ended higher on Monday on the eve of Election Day, despite selling in technology shares. Sentiment got boost after the report from the Institute for Supply Management (ISM) showed growth in US manufacturing activity accelerated by much more than expected in the month of October. The ISM said its purchasing managers index climbed to 59.3 in October from 55.4 in September, with a reading above 50 indicating growth in manufacturing activity. Street had expected the index to inch up to 55.8. Manufacturing performed well for the third straight month, with demand, consumption and inputs registering growth indicative of a normal expansion cycle, said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee. He added while certain industry sectors are experiencing difficulties that will continue in the near term, the overall manufacturing community continues to exceed expectations. Meanwhile, a separate report from the Commerce Department showed construction spending in the US increased by less than expected in the month of September. Among the prominent gainers today were shares from the energy sector. These stocks saw some brisk buying after crude oil prices moved higher despite persisting worries about outlook for energy demand.


Crude oil futures ended higher on Monday lifted by data showing another expansion in US manufacturing sector activity. Strong manufacturing data from China and the Euro area helped ease worries about outlook for energy demand. The manufacturing sector in China continued to expand in October, and at a faster rate, the latest survey from Caixin revealed with a manufacturing PMI score of 53.6, up from 53.0 in September. Meanwhile, markets were also looking ahead to the outcome of the US presidential election. Crude oil futures for December rose $1.02 or 2.9 percent to settle at $36.81 a barrel on the New York Mercantile Exchange. January Brent crude gained $1.03 or 2.7 percent to settle at $38.97 a barrel on London's Intercontinental Exchange.


Continuing previous session drubbing, Indian rupee depreciated significantly against dollar on Monday, on account of sustained dollar demand from importers and banks. Sentiments were impacted amid private report that the pandemic-induced growth contraction and additional spending to support the needy amounting to a little over 2 percent of the economy are likely to push the combined fiscal deficit to 13 percent of GDP this fiscal - nearly double of the past year. Traders ignored report that Indian manufacturing activity continued to improve in the month of October, amid robust sales growth. On the global front, dollar held steady on Monday as investors readied for this week's US presidential election, while a surge in global coronavirus cases continued to weigh on sentiment. Finally, the rupee ended at 74.42, 32 paise weaker from its previous close of 74.10 on Thursday.   


The FIIs as per Monday's data were net seller in equity segment, while net buyer in debt segment. In equity segment, the gross buying was of Rs 12403.88 crore against gross selling of Rs 13809.83 crore, while in the debt segment, the gross purchase was of Rs 1465.70 crore with gross sales of Rs 985.56 crore. Besides, in the hybrid segment, the gross buying was of Rs 65.26 crore against gross selling of Rs 74.80 crore.


The US markets ended higher on Monday as investors geared up for an event-packed week centered around the US presidential election. Asian markets are trading in green on Tuesday as investors shrugged off US election jitters and took hope in strong factory output data in China, Europe and the United States, although the dollar and gold firmed on political uncertainty. Indian markets ended higher on Monday after a volatile session led mainly by robust gains in banking and financial stocks. Today, the markets are likely to get optimistic start following overnight gains on Wall Street and positive cues from Asian peers. Traders will be taking encouragement with the economic think-tank NCAER's statement that its Business Confidence Index (BCI) rose 41.1 per cent in the July-September 2020 period, indicating signs of improvement. Some support will some as the Finance Ministry released Rs 6,000 crore as the second tranche to 16 States and three Union territories under its special window to states for meeting the GST compensation cess shortfall. Also, India has reported a decline in the number of fresh Covid-19 cases to 37,592 in the past 24 hours. The total caseload stands at 8,266,914. The country's death toll has mounted to 123,139. Besides, the government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs by one month till November 30, as the scheme has so far failed to meet the target of Rs 3 lakh crore. The scheme was valid till October-end. However, there may be some cautiousness as four former Reserve Bank governors warn that domestic banks, which have the highest bad loan pile in the world, pose a huge risk to the recovery of the pandemic-ravaged economy unless the government rescues them. Meanwhile, the Reserve Bank of India has extended trading hours for currency and rupee markets including forex derivatives, government securities, commercial paper and certificates of deposit by 90 minutes. The revised trading hours for rupee and bond markets are from 10 am to 3:30 pm as per Indian Standard Time as against 2 pm earlier. The revised timings will be effective from November 9, 2020. There will be some buzz in the telecom stocks with a private report that telecom sector's revenue growth picked up to about 5 per cent in the September quarter against 1 per cent in the June quarter after relaxation of lockdown curbs. There will be some reaction in hospitality industry stocks as hospitality industry body FHRAI urged the government to provide soft loans to the hotel and restaurant sector as businesses are finding it difficult to sustain themselves amid the COVID-19 pandemic. There will be lots of important earnings announcements too, to keep the markets in action.


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  • M&M has commenced the deliveries of the latest version of its iconic SUV, Thar. 
  • HDFC has reported 55.72% fall in its consolidated net profit attributable to owners at Rs 4599.68 crore for Q2FY21 as against net profit of Rs 10388.61 crore for Q2FY20.  
  • Coal India has reported rise in its production by 18.7% to 46.80 MT in October 2020 compared to 39.50 MT of coal in October last year. 
  • Hero MotoCorp has sold 806,848 units of motorcycles and scooters in October 2020 - its highest-ever sales in any single month.
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