NSE Intra-day chart (04 August 2020) | | | Top Gainers | | | Top Losers | | | World Indices | | | Indices | | | FII Activity(Rs. Cr) | | |
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Market Commentary | | 05 August 2020 | |
Benchmarks likely to open in green on positive global cues
Tuesday turned
out to be a fabulous day of trade for Indian equity benchmarks, where frontline
gauges garnered splendid gains, led by massive buying in index majors Reliance
Industries and HDFC Bank amid heavy foreign fund inflows and a positive trend
in global equities. The market indices snapped a four-session losing run, with
Sensex and Nifty closing just shy of their crucial 37,700 and 11,100 levels,
respectively. The benchmarks opened higher and gradually built on the rally to
close near the day's highs, as traders took encouragement with CARE Ratings'
report that banks have sanctioned around 44 percent of the targeted amount of
liquidity support to micro, small and medium enterprises (MSMEs) under the
government's Emergency Credit Line Guarantee Scheme (ECLGS). Besides, in order
to mitigate stress, State Bank of India's (SBI's) economists in its report has
pitched for a sector-specific loan restructuring package after the end of the
six-month loan repayment moratorium on August 31. Sentiments remained upbeat
during late afternoon session, with Commerce and Industry Minister Piyush
Goyal's statement that showing signs of significant improvement, the country's
exports in July have reached almost the level of the corresponding month last
year. He said several indicators are reflecting that the economic activities
are reviving in the country. He added that that the country today is in a mood
to not only bring back economic activity but also become self-reliant, improve
the quality and competitive pricing of products. Market participants shrugged
off the Asian Development Bank's (ADB) statement that global remittances will
fall by 108.6 billion dollars if the Covid-19 economic impact persists throughout
the year. This is equivalent to 18.3 per cent decline from what would have been
expected without the impact of Covid-19. Finally, the BSE Sensex gained 748.31
points or 2.03% to 37,687.91, while the CNX Nifty was up by 203.65 points or
1.87% to 11,095.25.
The US markets ended higher after a
choppy trading session Tuesday, with investors keeping one eye on stimulus
talks in Washington and another on mixed corporate earnings. Senate Majority
Leader Mitch McConnell, R-Ken said that he is prepared to support a coronavirus
relief bill agreement between Democrats and the White House even is he has some
problems with certain parts of it. However, uncertainty about a new stimulus
contributed to the choppy trading seen for much of the day, as negotiators have
thus far struggled to reach an agreement. Democrats and Trump administration
officials said they made progress towards a deal during a meeting on Monday,
but House Speaker Nancy Pelosi, D-Calif., noted the two sides still have our
differences. On the economic data front, a report released by the Commerce
Department showed another substantial increase in new orders for US
manufactured goods in the month of June. The Commerce Department said factory
orders soared by 6.2 percent in June after skyrocketing by a revised 7.7
percent in May. Street had expected factory orders to jump by 5.0 percent
compared to the 8.0 percent spike originally reported for the previous month.
The bigger than expected increase in factory orders came as orders for durable
goods surged up by 7.6 percent in June after soaring by 15.0 percent in May.
Orders for transportation equipment led the increase in durable goods orders
once again, skyrocketing by 20.2 percent in June.
Crude oil futures reversed early
losses, ending higher Tuesday with traders picking up positions ahead of
inventory data on hopes of a drop in stockpiles. However, oil prices dropped to
a low of $40.14 a barrel early on in the session, weighed down by concerns
about spikes in coronavirus cases in several countries and reports that many
have decided to extend lockdown measures. The overall number of global
coronavirus cases has topped 18.1 million, while the deaths have increased to
over 691,000. Meanwhile, as countries race to find a vaccine for Covid-19, the
World Health Organization warned that there might never be a silver bullet for
the coronavirus. Crude oil futures for September rose 69 cents or 1.7 percent
to settle at $41.70 a barrel on the New York Mercantile Exchange. October Brent
crude gained 28 cents or 0.6 percent to settle at $44.43 a barrel on London's
Intercontinental Exchange.
Tumbling for
second straight session; Indian rupee ended tad lower against dollar on
Tuesday, on account of dollar demand from importers and banks. Traders remained
cautious ahead of the Reserve Bank of India's three-day monetary policy meeting
that gets underway today. Sentiments were pessimistic as Asian Development Bank
(ADB) stated that global remittances will fall by 108.6 billion dollars if the
Covid-19 economic impact persists throughout the year. This is equivalent to
18.3 per cent decline from what would have been expected without the impact of
Covid-19. However, strong gains in domestic equity markets provided some
support to the rupee, keeping the downside in check. On the global front,
dollar faltered on Tuesday as political wrangling over a US relief plan and the
gloomy economic outlook kept investors shy of the currency. Finally, the rupee
ended at 75.04, 3 paise weaker from its previous close of 75.01 on Monday.
The FIIs as per
Tuesday's data were net buyers in equity, while they were net sellers in debt
segment. In equity segment, the gross buying was of Rs 13432.48 crore against
gross selling of Rs 5908.35 crore, while in the debt segment, the gross
purchase was of Rs 35.00 crore with gross sales of Rs 242.99 crore. Besides, in
the hybrid segment, the gross buying was of Rs 2.35 crore against gross selling
of Rs 2.96 crore.
The US markets ended higher after a
choppy session on Tuesday, lifted by Apple and energy stocks but limited by
declines in AIG and Microsoft while investors awaited more U.S. government
stimulus to fight economic fallout from the COVID-19 pandemic. Asian markets
are trading mostly in green ahead of private survey of China's services sector
in July, with the Caixin/Markit Services Purchasing Manager's Index will be in
focus. Indian equity markets traded superbly to end with a massive gain on
Tuesday supported by buying in heavyweights. Today, the start of session is
likely to be positive on firm global cues. Traders will be taking
encouragement. With the Department of Economic Affairs in its monthly
macroeconomic report stating the worst may now be over for India and the road
ahead will take the economy back on the track.
It added that Indicators such as Index of Industrial Production (IIP),
Purchasing Managers Index (PMI), power generation, production of steel and
cement, railway freight, traffic at major ports, air cargo and passenger
traffic, e-way bill generation capturing the inter-state movement of goods,
consumption of petroleum products, and motor vehicle registration, have shown
improvements. However, traders may remain concern on ICRA's report where it
mentioned that the securitisation volumes are estimated to significantly drop
to Rs 1.2-1.3 lakh crore during the current fiscal due to the impact of
COVID-19 and lower availability of eligible loan pools for securitisation. The
securitisation volumes in 2019-20 were around Rs 1.97 lakh crore. Meanwhile,
markets regulator SEBI has decided to decentralise work related to registration
of portfolio managers. It has been decided that the processing of registration
applications for portfolio managers received on or after Wednesday (August 5)
will be decentralised and delegated to the respective regional offices or head
office in Mumbai, based on the registered address of the applicant. Moreover,
manufacturers looking to set up industrial projects in India have reportedly
raised concerns regarding long approval wait times and multiple clearance
requirements with officials from the Department of Promotion of Industry and
Internal Trade (DPIIT).
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
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Previous
close
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Support
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Resistance
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NSE Nifty
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11,095.25
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10,964.82
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11,168.97
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BSE Sensex
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37,687.91
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37,201.89
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37,959.76
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Nifty Top volumes
Stock
|
Volume
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Previous close (Rs)
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Support (Rs)
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Resistance (Rs)
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(in Lacs)
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Tata Motors
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959.07
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111.45
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109.80
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114.10
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Zee
Entertainment Enterprises
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488.65
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143.35
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137.67
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146.97
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State Bank of
India
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438.67
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191.60
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190.13
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193.43
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Reliance
Industries
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424.77
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2150.60
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2044.90
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2211.65
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ICICI Bank
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308.14
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351.00
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345.73
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354.73
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