Indian equity benchmarks have
showcased a strong performance on Tuesday, by gaining more than a percent each
in the session and settling above the psychological 11,300 (Nifty) and 38,450
(Sensex) levels, amid buying across sectors, as equities across Asia rose on
hopes that another flood of US stimulus would cushion the global impact of
renewed coronavirus outbreaks. Markets made an optimistic start and traded in
fine fettle, as RBI Governor Shaktikanta Das made a strong case for stepping up
investments in the infrastructure sector to restart the economy reeling under
the impact of the COVID-19 pandemic. Some support also came in with Commerce
and Industry Minister Piyush Goyal's statement that the government will soon
set up a single window system for clearances and approvals for industry, and is
working on creating a land bank with a view to attract investments. Key gauges
extended their upside in second half of the session, taking support from the Finance
Ministry's statement that the Centre has released over Rs 1.65 lakh crore as
GST compensation to states for 2019-20 financial year, including Rs 13,806
crore for March. Traders remained optimistic with private report that the
digitalisation of small and medium businesses (SMBs) could add up to $216
billion to India's GDP by 2024 and contribute to the country's economic
recovery after COVID-19. Market participants paid no heed to 15th Finance
Commission Chairman N K Singh's statement that India will see a sharp V-shaped
recovery in the third and fourth quarter of the current fiscal, but FY21 GDP
growth would ultimately be in negative territory as the coronavirus lockdown
led to serious demand and supply dislocations. Finally, the BSE Sensex gained 558.22
points or 1.47% to 38,492.95, while the CNX Nifty was up by 168.75 points or
1.52% to 11,300.55.
The US markets settled lower on
Tuesday as investors monitored talks between Republicans and Democrats on a
second coronavirus aid package and tuned in to a deluge of second-quarter
corporate results. The GOP bill includes popular provisions like another $1,200
stimulus payment to American as well as more funding for the Paycheck
Protection Program. However, the legislation also slashes unemployment benefits
and provides liability protections for businesses and doctors, which could lead
to an impasse in negotiations with Democrats. Senate Majority Leader Mitch
McConnell said he will not bring up a bill in the Senate that does not include
liability protections. A negative reaction to earnings news from Dow components
3M and McDonald's also contributed to the weakness on markets. Shares of 3M
tumbled by 4.8 percent after the diversified manufacturer reported second
quarter results that missed street estimates on both the top and bottom lines.
McDonald's also slumped by 2.5 percent after the fast food giant reported
weaker than expected second quarter earnings on a slightly bigger than expected
drop in comparable-restaurant sales. Besides, negative sentiment was also
generated by a report from the Conference Board showing consumer confidence
deteriorated by more than expected in the month of July. The Conference Board
said its consumer confidence index slumped to 92.6 in July after jumping to an
upwardly revised 98.3 in June. Street had expected the consumer confidence
index to pull back to 95.7 from the 98.1 originally reported for the previous
month.
Crude oil futures ended lower on
Tuesday amid concerns about the outlook for near term energy demand due to the
surge in coronavirus cases and fears of fresh lockdown measures. A report from
World Health Organization (WHO) said global Covid-19 cases doubled over the
past six weeks. WHO Director-General Tedros Adhanom Ghebreyesus said he would
resume the Emergency Committee on Thursday to re-evaluate the Covid-19
pandemic. Meanwhile, the market oil is also preparing for a surge in supply
from the Organization of the Petroleum Exporting Countries and their allies,
who agreed to relax curbs on output by 2 million barrels a day beginning in
August. Crude oil futures for September dropped 56 cents or 1.4 percent to
settle at $41.04 a barrel on the New York Mercantile Exchange. September Brent
crude declined 19 cents or 0.4 percent to settle at $43.22 a barrel on London's
Intercontinental Exchange.
Indian rupee ended marginally
weak against the US dollar on Tuesday, on increased demand for the greenback
from importers and banks. Sentiments remained fragile with the Chairman of 15th
Finance Commission N K Singh's statement that India will see a sharp V-shaped
recovery in the third and fourth quarter of the current fiscal (FY21), while he
said Gross Domestic Product (GDP) growth in FY21 would ultimately be in
negative territory as the coronavirus lockdown led to serious demand and supply
dislocations. However, gains in domestic equity markets provided some support
to the rupee, keeping the downside in check. On the global front; dollar
bounced off a two-year low on Tuesday as selling pressure faded ahead of a
Federal Reserve meeting and as political wrangling over the next U.S. fiscal
rescue package moved closer to a conclusion. Finally, the rupee ended at 74.84,
1 paise weaker from its previous close of 74.83 on Monday.
The FIIs as per Tuesday's data
were net buyers in both equity segment and debt segment. In equity segment, the
gross buying was of Rs 4603.03 crore against gross selling of Rs 4563.58 crore,
while in the debt segment, the gross purchase was of Rs 820.61 crore with gross
sales of Rs 805.81 crore. Besides, in the hybrid segment, the gross buying was
of Rs 47.04 crore against gross selling of Rs 6.01 crore.
The US markets ended lower on
Tuesday as investors braced for prolonged negotiations between Democrats and
Republicans on another round of economic stimulus. Asian markets are trading
mixed on Wednesday as investors await the US Federal Reserve's interest rate
decision. Indian markets ended notability higher on Tuesday, mirroring firm
cues from Asia and Europe as investors weighed the possibility of additional
fiscal stimulus from the United States. Today, the start of session is likely
to be flat-to-positive despite mixed cues from Asian peers. Traders will be
taking encouragement with Industry body CII's statement that high frequency
indicators are showing a material improvement as compared to multi-year low
seen in April, and pointing towards a V-shaped recovery after the economy
suffered on account of lockdown amid the coronavirus pandemic. Some support
will also come with Union Minister Nitin Gadkari's statement that the government
is making efforts to attract FDI in infrastructure sector to address liquidity
crunch faced by the COVID-19-hit economy. Though, rising coronavirus cases may
dampen sentiments. India has recorded over 49,000 cases in the past 24 hours,
taking its total number of Covid-19-positive cases to 1,532,135. The country's
coronavirus caseload is the third-highest in the world, next only to the US
(4,498,000) and Brazil 2,484,649. There may be some cautiousness as global
forecasting firm Oxford Economics said that it expects India's GDP growth to
lose momentum from late third quarter (October-December) of the current fiscal
as the push from the initial reopening fades. There will be some buzz in the
banking and NBFCs stocks as Prime Minister Narendra Modi will hold a meeting
with stakeholders from Banks and NBFCs as well as secretaries to discuss and
deliberate on vision and roadmap for the future today. Real estate firm stocks
and housing finance companies stocks will be focus with a private report that
housing sales plunged 79 per cent to 19,038 units across eight major cities in
April-June, as demand was badly impacted due to the nationwide lockdown to
control Covid-19 pandemic. There will be some reaction in aviation stocks as
International Air Transport Association (IATA) has released recovery estimates
on Global passenger traffic and said it would take until 2024 for passenger
traffic to return to the pre-crisis level. There will be some important result
announcements to keep the markets in action.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,300.55
|
11,195.38
|
11,361.73
|
BSE Sensex
|
38,492.95
|
38,142.48
|
38,699.07
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
1,259.40
|
352.10
|
342.62
|
362.17
|
Tata Motors
|
642.72
|
106.45
|
103.23
|
108.43
|
State Bank of India
|
514.90
|
189.45
|
186.63
|
191.38
|
Axis Bank
|
330.58
|
437.05
|
427.63
|
443.23
|
Zee Entertainment
Enterprises
|
283.28
|
144.40
|
141.00
|
147.90
|
ITC has acquired 100% of the equity share capital of Sunrise Foods on July 27, 2020.
IOC and Total have formed a 50:50 JV company that will manufacture and market high-quality bitumen derivatives.
Maruti Suzuki is planning to offer fully-digitised financing options for car buyers.
Wipro has selected Google Cloud as the cloud provider for its enterprise-wide SAP footprint.