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NSE Intra-day chart (24 July 2020)
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Market Commentary 27 July 2020
Domestic markets to open in green amid positive Asian cues

 

In a highly volatile session, Indian equity benchmarks pared most of intra-day losses to end Friday's session on flat note with negative bias. Buying in Energy, IT and TECK stocks lifted the indices in the last hour of trade but couldn't pull the indices out of the red zone. Key indices kicked off session on sluggish note, following weakness in Asian peers amid Sino-U.S. tensions. Traders remained cautious with Economic Affairs Secretary Tarun Bajaj's statement that the government is unlikely to meet the Budget targets for 2020-21 due to the COVID-19 crisis but contraction in economic growth may not be as severe as being pointed out by the outside world. Selling further crept in with Rajya Sabha MP -- Subramanian Swamy's statement that India's growth rate may plunge to 6 to 9 percent during the current financial year due to COVID-19 pandemic and may bounce back next fiscal if correct policies were worked out. Markets also retreated on the back of a record jump in daily domestic coronavirus cases and its impact on economic recovery. However, markets reversed most their losses in dying hour of trade, as traders found some support with Finance Secretary Ajay Bhushan Pandey's statement that tax mop up in first quarter of the current fiscal is very encouraging and indicates that the economy is recovering sooner than what was anticipated at the time of imposition of lockdown. Some support may also come as IHS Markit expects the Indian economy to rebound in the second half of 2020 as the impact of the COVID-19 pandemic subsides, and predicts 6.7% growth in the next financial year. Meanwhile, the finance ministry has requested think tank Niti Aayog to work on a five-year asset monetisation road map as the Centre continues efforts to meet its funding needs. Finally, the BSE Sensex fell 11.57 points or 0.03% to 38,128.90, while the CNX Nifty was down by 21.30 points or 0.19% to 11,194.15.

 

Extending their previous session's losses, US markets ended lower on Friday as the technology-heavy Nasdaq Composite notched its first back-to-back decline since mid-May. Also, investors fretted about rising US-China tensions and a lack of progress on another fiscal stimulus bill in Washington. Beijing decided to revoke the license for the establishment and operation of the US Consulate General in Chengdu. The move comes just days after the US government ordered China to close its consulate in Houston, Texas, amid accusations Chinese diplomats aided in economic espionage and the attempted theft of scientific research. Worries about the continued spike in coronavirus cases also generated some negative sentiment, with the US reporting 68,663 new cases on Thursday, according to data compiled by Johns Hopkins University. On the economic front, the Commerce Department released a report showing new home sales in the US continued to spike in the month of June. The Commerce Department said new home sales soared by 13.8 percent to an annual rate of 776,000 in June after skyrocketing by 19.4 percent to a revised rate of 682,000 in May. Street had expected new home sales to jump 3.6 percent to a rate of 700,000 from the 676,000 originally reported for the previous month. With the much bigger than expected increase, new home sales continued to rebound after falling to the lowest annual rate in well over a year in April and reached their highest level since July of 2007.

 

Crude oil futures ended higher with modest gains on Friday as stronger-than-expected economic data from Europe and the US helped to ease worries about energy demand outlook a bit. US business activity increased to a six-month high in July, snapping five straight months of contractions. Though, gains remained capped as investors weigh some signs of economic improvement against tensions between the world's biggest economic superpowers, both of which may influence global energy demand. Traders also continued to eye the impact of rising cases of COVID-19 in parts of the world, which could lead to business disruptions and a slowdown in economic recovery. Crude oil futures for September gained 22 cents or 0.5 percent to settle at $41.29 a barrel on the New York Mercantile Exchange. September Brent crude inched up by 3 cents or 0.07 percent to settle at $43.34 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended weaker against the US dollar on Friday, on increased demand for the greenback from importers and banks. Traders remain concerned with Economic Affairs Secretary Tarun Bajaj's statement that the government is unlikely to meet the Budget targets for current financial year (FY21) due to the COVID-19 crisis but contraction in economic growth may not be as severe as being pointed out by the outside world. Further, US-China tensions, pressure in Indian equity markets and surge in coronavirus cases too dented the investors' sentiment. On the global front; Japanese yen rose to a one-month high while the euro's gains paused as traders waited for flash Purchasing Managers' Index readings for July across major developed economies. Finally, the rupee ended at 74.84, 9 paise weaker from its previous close of 74.75 on Thursday.

 

The FIIs as per Friday's data were net buyers in both equity segment and debt segment. In equity segment, the gross buying was of Rs 5785.23 crore against gross selling of Rs 3670.88 crore, while in the debt segment, the gross purchase was of Rs 937.04 crore with gross sales of Rs 679.70 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.97 crore against gross selling of Rs 1.54 crore.

 

The US markets ended lower on Friday as investors grew anxious about rising tensions with China and a potential stalling of the economic recovery. Asian markets are trading mostly in green on Monday as China's industrial profits for June soared 11.5% year-on-year, according to the country's National Bureau of Statistics. Indian markets came off intraday lows and ended flat on Friday as losses in banking heavyweights like ICICI Bank, Axis Bank and State Bank of India were offset with gains in Reliance Industries. Today, the start of the crucial F&O series expiry week is likely to be a higher tailing the positive cues from Asian peers. Investors will be eyeing RBI Governor Shaktikanta Das' address to the CII National Council members later today. Traders will be taking encouragement as terming India as the best destination for foreign investment with high returns, Union Minister Nitin Gadkari urged European investors to invest in India. Also, RBI data showed the country's foreign exchange reserves surged by $1.275 billion to touch a fresh lifetime high of $517.637 billion in the week to July 17. However, rising coronavirus cases may dampen sentiments in the markets. India's daily addition to coronavirus tally has crossed the 50,000 mark, with the country recording over 5,0500 in just 24 hours. The total Covid tally in India now stands at 1,436,019, including over 32,800 deaths. Traders may be concerned with report that foreign portfolio investors (FPIs) remained net sellers in Indian markets in July so far on account of both domestic and global factors, including rising number of coronavirus cases and increasing tension between the US and China. There may be some reaction with a private report that the Indian economy is likely to face inflationary pressures in the near term, as factors like supply chain disruption and lack of low-wage workers are expected to offset the deflationary pressures from subdued demand in the economy. There will be some buzz in the fertilizer stocks with Chemicals and Fertilisers Minister D V Sadananda Gowda's statement that the government is taking measures for ease of doing business in the fertiliser sector and to ensure smooth supply of soil nutrients to farmers. Aviation stocks will be in focus as India extended the ban on capacity addition and capping of fare by airlines till November 24 amid growing coronavirus cases in the country. There will be some reaction in MSMEs stocks as the finance ministry said banks have sanctioned loans of about Rs 1,30,491 crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector, hit hard by the economic slowdown caused by COVID-19 pandemic. There will be earnings announcements too, to keep the markets in action.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,194.15

11,114.50

11,249.60

BSE Sensex

38,128.90

37839.63

38326.95

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

 

Support  (Rs)

 

Resistance (Rs)

 

(in Lacs)

State Bank of India

652.66

191.95

189.63

195.28

ITC

601.86

199.60

197.37

201.77

Reliance Industries

556.57

2,146.15

2081.63

2186.83

ICICI Bank

529.82

381.80

373.07

389.62

Tata Motors

393.66

103.75

102.47

105.27

 

  • Maruti Suzuki India has introduced Smartplay Studio Infotainment System in Ignis Zeta MT & AMT variants. 
  • Wipro has signed a definitive agreement to acquire 4C, one of the largest Salesforce partners in UK, Europe and the Middle East. 
  • HUL is planning to retain its xtea business in India and Indonesia, months after it announced a global review of its portfolio in January this year. 
  • Reliance Industries' telecom arm -- Jio has topped Trai's 4G speed chart with an average download speed of 16.5 mbps in June.
News Analysis
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Arvind Fashions has raised Rs 399.79 crore through rights issue and allotted 3,99,79,347 fully paid up rights equity share of face value of Rs 4 each at a price of Rs 100 per rights equity share including a share premium of Rs 96 per rights ...


Control Print has commenced the commercial production of face mask effective from July 24, 2020, along with the present business activity of coding and marking at the company's factory situated at Nalagarh, Himachal Pradesh.

...


Zee Entertainment Enterprises (ZEEL) has entered into a Share Purchase Agreement (SPA) with Mantena Aviation LLP and Fly-By-Wire International, a wholly owned subsidiary of the company for transfer of equity shares of the subsidiary in two t...