NSE Intra-day chart (20 July 2020) | | | Top Gainers | | | Top Losers | | | World Indices | | | Indices | | | FII Activity(Rs. Cr) | | |
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Market Commentary | | 21 July 2020 | |
Markets to open in green amid firm global cues
Indian equity indices ended
higher on Monday, marking the fourth successive day of gains, shrugging off
weak trend in Asian markets and concerns over mounting COVID-19 cases. Markets
recaptured their crucial 11,000 (Nifty) and 37,400 (Sensex) levels. Key gauges
made an optimistic start and traded with a positive bias throughout session, as
sentiments got a boost with Reserve Bank of India (RBI) executive director M
Rajeshwar Rao's statement that future economic policies need to be modified
towards supporting the economy, depending on how effects of Coronavirus disease
(COVID-19) pandemic play out. Some positivity also came with the Agriculture
Ministry's statement that there has been no impact of COVID-19 pandemic on
kharif (summer) sowing as the total area planted to rice and other crops has
increased by 21.20% to 691.86 lakh hectare so far in the current season.
Separately, the latest data from the Reserve Bank of India (RBI) showed that
forex reserves rose $3.1 billion to hit a record high of $516.36 billion for
the week ended July 10. However, markets turned volatile and gave up some of
gains in late morning session, as some cautiousness came with India Ratings and
Research's (Ind-Ra) report that the government's fiscal deficit is estimated to
touch 7.6% in FY21, more than double the Budget Estimate (BE), as the nation
spends extra to lessen the impact of the COVID-19 pandemic while facing a
shortfall in incomes. But, in the final hour of trade, domestic indices gained
traction and settled over a percent higher each, as traders found support with
Niti Aayog CEO Amitabh Kant's statement that clean energy has potential to
shore up the Indian economy from the current downturn. He also urged investors
to exploit long-term opportunities in the sector. Local investors cheered with
World Federation of Direct Selling Associations' (WFDSA) The Global Direct
Selling - 2019 Retail Sales report stating that the Indian direct selling
industry has recorded sales of $2.47 billion in 2019, reporting a growth of
12.1 percent. This has helped the direct selling industry improve its ranking
to the 15th from the earlier 19th a year before. Finally, the BSE Sensex rose
398.85 points or 1.08% to 37,418.99, while the CNX Nifty was up by 120.50
points or 1.11% to 11,022.20.
The US markets ended higher on
Monday, with the Nasdaq scoring a record close, as traders cycled back into
big-name tech stocks. Shares of Amazon skyrocketed by 7.9 percent after Goldman
Sachs and Jefferies both raised their price targets for the online retail giant
to $3,800 per share. Software giant Microsoft, Google parent Alphabet and tech
giant Apple also posted standout gains. The jump by Microsoft also contributed
to significant strength in the software sector, with the Dow Jones US Software
Index soaring by 4.1 percent. Further, investors focused on positive
developments from coronavirus vaccine candidates and talks in Washington on
fresh stimulus. Meanwhile, investors looked forward to quarterly results from
corporations over the coming days. However, the US coronavirus case tally rose
to nearly 3.8 million on Monday and the death toll topped 140,000, as new
infections continued to surge in the South and West. While the federal
government has refused to mandate facial coverings, major retailers have begun
to impose their own requirements. The escalation of the deadly pandemic in the
US is diminishing hopes for a V-shaped, or quick and strong, economic recovery
from the pandemic, as the virus taxes the public-health systems of some states
and municipalities and forces local officials to restore lockdown measures to
limit a more severe outbreak.
Crude oil futures ended higher on
Monday as positive trial results for a coronavirus vaccine helped to offset
energy-demand concerns tied to the rise in global cases of COVID-19 above 14.5
million. A potential coronavirus vaccine developed by Oxford University with
AstraZeneca seems to be safe and has produced strong immune response in
early-stage human trial. Also, US drugmaker Pfizer and CanSino Biologics,
China, have reportedly found positive responses for their candidates. Crude oil
futures for August rose 22 cents or 0.5 percent to settle at $40.81 a barrel on
the New York Mercantile Exchange. September Brent crude gained 14 cents or 0.3
percent to settle at $43.28 a barrel on London's Intercontinental Exchange.
Indian rupee continued its upward
momentum for the second day and ended fairly higher against US dollar on
Monday, on the back of selling of the American currency by exporters. Besides,
gains in domestic equity markets also provided support to the rupee. Traders
were getting support with Niti Aayog CEO Amitabh Kant's statement that clean
energy has potential to shore up the Indian economy from the current downturn.
He also urged investors to exploit long-term opportunities in the sector. On
the global front; euro retreated after hitting a 19-week high of $1.1467 on
Monday after EU summit chairman Charles Michel said a recovery fund to revive
economies hit by the COVID-19 pandemic could contain 390 billion euros in
grants. Finally, the rupee ended at 74.91, 11 paise stronger from its previous
close of 75.02 on Friday.
The FIIs as per Monday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 5366.79 crore against gross selling of Rs 4564.48 crore, while
in the debt segment, the gross purchase was of Rs 946.89 crore with gross sales
of Rs 881.47 crore. Besides, in the hybrid segment, the gross buying was of Rs
16.52 crore against gross selling of Rs 17.16 crore.
The US markets ended higher on
Monday spurred on by a rally in tech stocks and continued optimism about the
prospects of a novel coronavirus vaccine being ready for production later this
year. Asian markets are trading in green on Tuesday following overnight gains
on Wall Street. Indian markets ended higher on Monday as strong June-quarter
results by HDFC Bank lifted investors' sentiment, adding to last week's strong
IT earnings releases. Today, the start of session is likely to be optimistic
following firm global cues. Traders will be getting encouragement with the
preliminary data from early stages of human trials showing that the COVID-19
vaccine candidate being developed by the Oxford University and AstraZeneca is
safe, well-tolerated, and immunogenic (capable of inducing an immune response).
Some support will come with a labour ministry's statement that retail inflation
for farm and rural workers in June eased to 7.16 per cent and 7 per cent,
respectively, as compared to May this year. Also, the India Meteorological
Department (IMD) in its latest forecast said rains would pick up in the next
few days over north and south India. Traders may take note that Commerce and
Industry Minister Piyush Goyal called upon Indian investors to play a greater
role in providing funds to domestic start-ups with a view to promote the growth
of budding entrepreneurs. Though, there may be some cautiousness due to rising
coronavirus cases in the country. With over 36,000 new cases being reported on
July 20, the total number of coronavirus cases in India has reached 1,154,917,
and the country's Covid-19 death toll has reached 28,099. Market participants
may be concerned with External Affairs Minister S Jaishankar's statement that
Free Trade Agreements (FTA) have not served India well, and made a pitch for
India to look at opportunities beyond FTAs to bolster its trade ties. There
will be some buzz in the telecom stocks as the Supreme Court reserved its order
in the adjusted gross revenue (AGR) case. E-commerce stocks will be in focus
with Union minister Ram Vilas Paswan's statement that the new rules for
electronic retailers, including mandatory display of 'country of origin' on
their products, will come into force by the end of this week, and emphasised
that the entities will face penal action for any non-compliance. There will be
some reaction in cement stocks with ratings agency Icra's statement that cement
demand is likely to de-grow by up to 25 per cent this fiscal on account of the
coronavirus lockdown and subsequent specific restrictions disrupting
construction activities. There will be some result announcements to keep the
markets in action.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,022.20
|
10,970.83
|
11,055.73
|
BSE Sensex
|
37,418.99
|
37,243.56
|
37,536.65
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
456.81
|
190.75
|
188.58
|
193.08
|
Tata Motors
|
397.88
|
105.05
|
103.82
|
106.32
|
ICICI Bank
|
363.13
|
363.00
|
356.72
|
367.82
|
HDFC Bank
|
325.62
|
1,133.05
|
1,120.50
|
1,149.25
|
Axis Bank
|
304.01
|
434.00
|
427.93
|
441.43
|
HDFC Bank has received shareholders' approval for raising up to Rs 50,000 crore through various modes. Sun Pharmaceutical Industries is aiming to gain market share in all the verticals it is present in amid challenges posed by the coronavirus pandemic. Maruti Suzuki India is aiming to expand its CNG products range to bring in additional volumes. Cipla has reached a settlement with Amgen Inc on pending litigation involving generic cinacalcet hydrochloride tablets.
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