Indian equity benchmarks ended
Thursday's session near day's high with a gain of over two percent each, on the
back of strong buying in banking, financial and metal stocks despite weak cues
from global markets. Key bourses started the day on tepid note, as border
tensions between India and China continued to simmer while COVID-19 infections
surged. But, markets soon inched higher and traded in fine fettle as traders
found some support with Federation of Indian Export Organisations (FIEO)
President S K Saraf's statement that the ongoing India-China border tensions
may not have any immediate impact on the bilateral trade relations. Some
optimism also came as Prime Minister Narendra Modi told the Chief Ministers of
14 States and the Lieutenant-Governor of a Union Territory to think about
Unlock 2, following the graded opening of economic activities under Unlock 1
since June 1. Markets extended northward moment in the last leg of trade, as
investments through participatory notes (P-notes) in the domestic capital
market rose to Rs 60,027 crore till May-end, making it the second consecutive
monthly increase. Sentiments also remained buoyant with report that the finance
ministry has released Rs 15,187 crore to 28 states as grants to rural local
bodies to help them restart economic activity. The basic grants can be used by
the local bodies for location-specific felt needs, except for salary or other
establishment expenditure. Investors paid no heed towards global rating agency
Fitch Ratings' report in which it has revised India's outlook to negative from
stable, stating that the coronavirus pandemic has significantly weakened the
country's growth prospects for the year and exposed the challenges associated
with a high public-debt burden. Finally, the BSE Sensex gained 700.13 points or
2.09% to 34,208.05, while the CNX Nifty was up by 210.50 points or 2.13% to
10,091.65.
The US markets ended higher on
Thursday, but the Dow Jones closed lower for a second straight session, as
investors digested a weekly report on the labor market in the US and contended
with signs of rising cases and hospitalizations of COVID-19 in several states. New
US cases and hospitalizations remain a source of anxiety for investors, with
Texas, Arizona, Florida and Oklahoma reporting growing infections. 259 new
cases over the previous day in Oklahoma, with President Donald Trump set to
hold a campaign rally in Tulsa over the weekend. Florida reported more than
2,600 new cases and Arizona more than 1,800. On the economic data front, the
Labor Department released a report showing first-time claims for unemployment
benefits fell by much less than expected in the week ended June 13. The Labor Department
said initial jobless claims dropped to 1.508 million, a decrease of 58,000 from
the previous week's upwardly revised level of 1.566 million. Street had
expected jobless claims to tumble to 1.300 million from the 1.542 million
originally reported for the previous week. Meanwhile, the Philadelphia Federal
Reserve released a separate report showing an unexpected expansion in regional
manufacturing activity in the month of June. The Philly Fed said its diffusion
index for current general activity soared to a positive 27.5 in June from a
negative 43.1 in May, with a positive reading indicating an expansion in
regional manufacturing activity. Street had expected the index to show a much
more modest increase to a negative 23.0, which would have still indicated a
contraction.
Crude oil futures ended higher on
Thursday after major producers at an OPEC-led meeting of the Joint Ministerial
Monitoring Committee (JMMC), stressed the importance of full compliance with
pledged production cuts and made moves to ensure that certain countries make up
for failing to fully meet their reduction targets last month. The JMMC pegged
its compliance with those production cuts at 87% in the month of May. It
reiterated the importance that all participating countries reach 100% of their
pledged cuts and that they make up for any previous shortfalls in the upcoming
months of July, August and September. Crude oil futures for July rose 88 cents
or 2.3 percent to settle at $38.84 a barrel on the New York Mercantile
Exchange. August Brent crude gained 80 cent or 2 percent to settle at $41.51 a
barrel on London's Intercontinental Exchange.
Indian rupee strengthened
marginally against dollar on Thursday, tracking weak US dollar and gains in the
domestic equity market. Traders took some support with FIEO President S K
Saraf's statement that the ongoing India-China border tensions may not have any
immediate impact on the bilateral trade relations. However, gains remain capped
as anxiety remained among traders as Fitch Ratings revised India's outlook to
negative from stable, stating that the coronavirus pandemic has significantly
weakened the country's growth prospects for the year and exposed the challenges
associated with a high public-debt burden. On the global front, sterling dipped
against the dollar and euro on Thursday as some investors braced for a
larger-than-expected increase in the Bank of England's quantitative easing
programme to combat the economic fallout of the COVID-19 pandemic. Finally, the
rupee ended at 76.14, 2 paise stronger from its previous close of 76.16 on
Wednesday.
The FIIs as per Thursday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 6492.93 crore against gross
selling of Rs 5715.91 crore, while in the debt segment, the gross purchase was
of Rs 733.22 crore with gross sales of Rs 1208.94 crore. Besides, in the hybrid
segment, the gross buying was of Rs 8.24 crore against gross selling of Rs 1.34
crore.
The US markets ended mostly
higher on Thursday as traders digest a mixed batch of US economic data. Asian
markets are trading mixed on Friday as investors continued to monitor the
situation surrounding a recent uptick in coronavirus cases in some countries.
Indian markets ended higher with notable gains on Thursday, with heavyweight
Reliance Industries and banks leading the surge despite mixed cues from global
cues. Today, the markets are likely to make cautious start amid mixed cues from
Asian peers and India-China border tensions continued. Rising coronavirus cases
may also impact the sentiments as India has added nearly 14,000 cases of
coronavirus in 24 hours, taking its total to 367,264. There will be some
cautiousness as the Asian Development Bank projected India's economy to
contract by four per cent in the current financial year against its earlier
prediction of a growth of four per cent as measures to contain Covid-19 have
significantly disrupted activities. Traders will be concerned with Icra's
report that earnings of India Inc fell by nearly a fourth in January-March as
compared to the year-ago period due to legacy problems, warning of deeper
impact in the June quarter due to Covid-19-induced lockdown. Absolute earnings
of the corporate India contracted by 22% and 12% in Q4FY20 and FY20,
respectively. However, traders may take encouragement with Prime Minister
Narendra Modi's statement that economic indicators show that India is ready for
a swift bounce back as business activity and demand are back to the level seen
before the Covid-19 pandemic. Some support may also come with report that the
government is working on steps to reduce import dependence on China and boost
domestic manufacturing. Besides, the United Nations Conference on Trade and
Development (UNCTAD) has said that India's economy could prove the most
resilient in South Asia and its large market will continue to attract
market-seeking investments to the country even as it expects a dramatic fall in
global foreign direct investment (FDI). There will be some buzz in the coal
stocks as Prime Minister Narendra Modi
launched the first-ever coal auction for commercial mining, ending the monopoly
of Coal India in a bid to curb import dependence despite having the
fourth-largest reserves in the world. There will be some reaction in sugar
stocks with Food Secretary Sudhanshu Pandey's statement that the government is
considering a proposal to increase the minimum selling price (MSP) of sugar
from Rs 31 per kg in order to help millers clear cane dues of about Rs 22,000
crore to farmers.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,091.65
|
9,920.73
|
10,186.88
|
BSE Sensex
|
34,208.05
|
33,627.71
|
34,532.20
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
589.65
|
96.35
|
94.60
|
97.65
|
State Bank of India
|
582.62
|
179.65
|
173.62
|
183.17
|
Axis Bank
|
437.74
|
405.40
|
390.25
|
414.30
|
ICICI Bank
|
392.87
|
352.00
|
341.23
|
358.73
|
Zee Entertainment
Enterprises
|
379.17
|
174.40
|
168.12
|
178.07
|
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