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NSE Intra-day chart (20 November 2020)
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Market Commentary 23 November 2020
Benchmarks to open in green tracking Asian peers

 

In a volatile session, Indian equity benchmarks ended in green with gains of over half percent each on Friday, tracking gains in index-heavyweights Bajaj Finserv, Titan Company and Bajaj Finance amid largely positive cues from global markets and sustained foreign fund inflow. Benchmarks made positive start, as traders got encouragement with report that investments through participatory notes (P-notes) in the Indian capital market surged to Rs 78,686 crore at October-end, making it the highest level in 14 months, on enhanced global liquidity and measures taken by the government back home. Some support also came as the Reserve Bank announced to conduct simultaneous purchase and sale of government securities under open market operations (OMOs) for Rs 10,000 crore each on November 26. The decision was taken after a review of the current liquidity and financial conditions. However, key gauges cut all of their gains to turn negative in late morning deals, as Global forecasting firm Oxford Economics revised downwards its India growth forecast over the medium term to an average 4.5 per cent over 2020-25, from its pre-pandemic projection of 6.5 per cent. In a research note, it said India's post-COVID-19 scars could be among the worst in the world. But, market indices once again turned bullish in the last hour of trade, as some optimism remained among traders with Rating agency ICRA's report stated that the Year-on-Year (YoY) contraction in India's Gross Domestic Product (GDP) (at constant 2011-12 prices) is expected to narrow appreciably to 9.5 percent in the second quarter of the current fiscal (Q2FY21) from 23.9 percent in Q1FY21, as the economy recovered from the lows of the pandemic-induced lockdown. Some support also came with Prime Minister Narendra Modi's statement that the belief in democracy, rule of law and freedom is the strength of the partnership between India and Luxembourg. He also said India-Luxembourg's partnership amid the COVID-19 pandemic can be beneficial for the recovery of both the countries. Market participants also took a note of Union IT and Communications Minister Ravi Shankar Prasad's statement that the government was very keen to promote India as a very big centre of the data economy and would finalise a data protection law very soon. Finally, the BSE Sensex rose 282.29 points or 0.65% to 43,882.25, while the CNX Nifty was up by 87.35 points or 0.68% to 12,859.05.

 

The US markets ended lower on Friday on concerns about the near-term economic outlook amid a continued spike in new coronavirus cases in the US. The latest data from John Hopkins University showed nearly 188,000 new coronavirus cases on Thursday, while the daily death toll topped 2,000 for the first time. The continued surge in new cases, hospitalizations and deaths in the US has raised concerns new restrictions and lockdowns will dampen the economy recovery. While there continues to be upbeat news on the vaccine front, traders seem worried about an economic downturn the months leading up to the widespread distribution of a vaccine. Adding to the economic uncertainty, Treasury Secretary Steven Mnuchin announced a decision to allow five of the Federal Reserve's nine emergency lending programs to expire at the end of the year. The Fed responded to the decision in a rare public statement, saying it would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for the still-strained and vulnerable economy.

 

Crude oil futures settled higher on Friday, lifted by optimism about a Covid-19 vaccine and a likely pick-up in energy demand once the vaccines get the nod from drug regulators. Oil was also supported by expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will eventually agree to defer relaxing output curbs so as to balance the oil market. OPEC and its allies are scheduled to meet on November 30 and December 1 to consider options to delay tapering their output cuts by around 2 million barrels per day. Higher crude output from Libya raised concerns about likely excess supply in the market and limited oil's uptick.  Crude oil futures for December rose $0.41 or about 1 percent to settle at $42.15 a barrel on the New York Mercantile Exchange, on the expiration day. January Brent crude gained $0.60 or 1.3 percent to settle at $44.80 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended significantly higher against dollar on Friday, on persistent selling of the American currency by exporters. Sentiments were upbeat as Rating agency ICRA's report stated that the Year-on-Year (YoY) contraction in India's Gross Domestic Product (GDP) (at constant 2011-12 prices) is expected to narrow appreciably to 9.5 percent in the second quarter of the current fiscal (Q2FY21) from 23.9 percent in Q1FY21, as the economy recovered from the lows of the pandemic-induced lockdown. On the global front, dollar edged up against a basket of currencies, its downward trend was interrupted when US Treasury Secretary Steven Mnuchin called an end to some of the Federal Reserve's pandemic lending.  Finally, the rupee ended at 74.16, 11 paise stronger from its previous close of 74.27 on Thursday.

 

The FIIs as per Friday's data were net buyer in equity segment and net seller in debt segment. In equity segment, the gross buying was of Rs 11693.80 crore against gross selling of Rs 9505.64 crore, while in the debt segment, the gross purchase was of Rs 347.36 crore with gross sales of Rs 1113.67 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.71 crore against gross selling of Rs 9.99 crore.

 

The US markets ended lower on Friday on a combination of dwindling aid for the US economy and rising novel coronavirus infection rates. Asian markets are trading mostly in green on Monday as hopes for imminent coronavirus vaccines buoyed investor sentiment, but worries over the impact of economic lockdowns and uncertainty over US stimulus capped gains. Indian markets ended higher Friday led by gains in banking and IT stocks amid mixed global cues. Today, the start of the crucial F&O series expiry week is likely to be positive tailing the Asian cues and as investors continued to follow positive vaccine developments. Traders will be taking encouragement with Industry body FICCI's latest quarterly survey on manufacturing showing that India's manufacturing sector is poised to witness recovery in the July-September quarter, even as hiring outlook for the segment remains bleak. The proportion of respondents reporting higher output during July-September rose to 24 per cent, as compared to 10 per cent in the previous quarter. Some support will come with report that Foreign Portfolio Investors (FPI) have continued to buy domestic equities and debt instruments. So far in November FPIs have bought Rs 44,378 crore worth of stocks and Rs 5,175 crore worth of debt.  Also, the RBI's data showed that bank credit grew by 5.67 per cent to Rs 104.04 lakh crore, while deposits increased by 10.63 per cent to Rs 143.80 lakh crore in the fortnight ended November 6. Meanwhile, Terming the COVID-19 pandemic an important turning point in the history of humanity and the biggest challenge the world is facing since World War II, Prime Minister Narendra Modi at the G20 summit called for a new global index based on talent, technology, transparency and trusteeship towards the planet in the post-corona world. Though, there may be some cautiousness as the total confirmed case count in India has now crossed 9.1 million. On Sunday, India reported 44,404 fresh Covid-19 cases, taking its tally to 9,140,312. The country's death toll has mounted to 133,773. Banking-related stocks and financials will be in focus, after the RBI panel recommended several changes in the banking industry which includes proposals to raise promoters cap to 26 per cent from current 15 per cent in 15-year period and to allow large corporate houses as promoters of banks or take a significant stake in banks. Infrastructure industry related stocks will be in limelight with report that as many as 437 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.37 lakh crore. The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

12,859.05

12,762.05

12,924.25

BSE Sensex

43,882.25

43,553.00

44,112.27

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

State Bank of India

844.11

242.75

236.00

247.45

Tata Motors

669.36

169.10

165.91

171.91

NTPC

476.71

91.80

90.44

92.64

ITC

453.07

191.70

187.84

193.79

ICICI Bank

300.89

480.20

471.05

486.40

 

  • Simplus, an Infosys company has collaborated with Salesforce for a vaccine management cloud solution built on the Salesforce Platform in support of Salesforce Work.com for Vaccines. 
  • SBI has signed a MoU with the Luxembourg Stock Exchange for setting up a long-term cooperation mechanism and promoting ESG and green finance. 
  • Reliance Industries and its subsidiary company -- Reliance Retail Ventures have completed the current phase of partner induction and fund raise exercise for RRVL.  
  • HDFC is planning to raise Rs 3000 crore through secured redeemable Non-Convertible Debentures with option to retain oversubscription upto Rs 2000 crore.
News Analysis

Majesco has declared a share buyback plan of up to Rs 631.26 crore. The buyback will open on November 27 and close on December 11. Maximum number of Equity Shares proposed to be bought back i.e. 74,70,540 equity shares multiplied by the bu...


RMC Switchgears has bagged sales order of Rs. 3.28 crore from MSEDCL. The COVID-19 pandemic has brutally exposed and worsened existing vulnerabilities in the Indian economy. In order to cope up with this situation, the Company has streamli...


SpiceJet has started operating flights on the Hyderabad-Nashik route under regional connectivity scheme Udan. The airline will be operating four weekly flights and will deploy its 78-seater Q400 aircraft. Nashik is the 14th destination to be...


Bharti Airtel has entered into an agreement for acquisition of equity shares in Avaada MHBuldhana a special purpose vehicle formed for the purpose of owning and operating the Captive Power Plant, in terms of the regulatory requirement for ca...