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NSE Intra-day chart (08 December 2020)
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Market Commentary 09 December 2020
Benchmarks likely to make optimistic start on firm global cues

 

Indian equity benchmarks ended Tuesday's volatile session on a positive note amid buying in counters such as Ultratech Cement, TCS, Reliance Industries and Infosys.  Markets made slightly positive start and soon extended gains, as sentiments got a boost with Niti Aayog vice chairman Rajiv Kumar's statement that the government is committed to improving the ease of doing business and innovation ecosystem where every school student has access to the innovative tools and trends. Traders also took note of report that companies raised Rs 73,215 crore from the capital markets in October, with private placement of debt instruments continuing to be the most-preferred route for funding. However, key indices erased gains and traded flat in afternoon session, even as Fitch Ratings revised up India's GDP projection to a contraction of 9.4 per cent due to a strong economic recovery in the second quarter of the current fiscal year. It earlier suggested that India's GDP may shrink by 10.5 per cent in the FY21. Fitch Ratings further projected an 11 per cent growth and 6.3 per cent growth in the following years. But, markets regained their positive momentum to end higher, as some optimism remained among traders with Union Health Minister Harsh Vardhan's statement that more than 100 startups have provided innovative products and solutions to overcome challenges posed by the pandemic. Finally, the BSE Sensex jumped 181.54 points or 0.40% to 45,608.51, while the CNX Nifty was up by 37.20 points or 0.28% to 13,392.95.

 

The US markets ended higher on Tuesday as positive developments on the vaccine front and hopes of a fiscal stimulus outweighed reports showing a surge in coronavirus cases across the country. Meanwhile, reports about the UK beginning to administer the coronavirus vaccine developed by Pfizer/BioNTech and that it found no safety concerns with the vaccine helped lift sentiment. The continued surge in coronavirus cases and increasing number of hospitalizations in the U.S. boosted hopes for a US pandemic stimulus. The US Congress is expected to vote this week on a one-week stopgap funding bill to give negotiators more time to strike a compromise. US Senate Democratic leader Chuck Schumer said there were signs of progress in talks on a bipartisan bill. Besides, the US Food and Drug Administration (FDA) announced that the Pfizer-BioNTech COVID-19 vaccine BNT162b2 is safe and effective. The FDA in a detailed analysis concluded that safety data from about 38,000 participants suggest a favorable safety profile, with no specific safety concerns identified that would preclude issuance of an EUA.

 

Crude oil futures ended lower on Thursday amid worries about outlook for energy demand due to the continued surge in coronavirus cases in several states across the US and reports of tight lockdown measures in several countries across the world. Coronavirus cases are on the rise in the US. The governors of New York and California have warned of a crisis that is filling up hospitals. Data showing OPEC oil production climbed to a six-month high in November, rising by 25.21 million barrels per day, also weighed on crude oil prices. Crude oil futures for January dropped $0.16 or 0.4 percent to settle at $45.60 a barrel on the New York Mercantile Exchange. February Brent crude settled roughly flat at $$48.84 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended significantly stronger against dollar on Tuesday due to fresh selling of the American currency by banks and exporters. Sentiments were upbeat with Niti Aayog vice chairman Rajiv Kumar's statement that the government is committed to improving the ease of doing business and innovation ecosystem where every school student has access to the innovative tools and trends. He also said the Indian economy will be among the top economies in the world in the next few years using science, technology, and innovation in all the sectors, bouncing back soon from the after-effects of coronavirus disease (covid-19) pandemic. On the global front; pound was the biggest mover in otherwise quiet trade among the G10 group of currencies on Tuesday, falling broadly as caution grew among investors awaiting the outcome of Brexit trade deal talks that have come down to the wire. Finally, the rupee ended at 73.60, 30 paise stronger from its previous close of 73.90 on Monday.

 

The FIIs as per Tuesday's data were net buyer in equity segment and net seller in debt segment. In equity segment, the gross buying was of Rs 8729.82 crore against gross selling of Rs 5315.40 crore, while in the debt segment, the gross purchase was of Rs 289.05 crore with gross sales of Rs 468.89 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.84 crore against gross selling of Rs 9.08 crore.

 

The US markets ended higher on Tuesday boosted by gains in the healthcare sector on the back of positive vaccine news and seeming progress on US stimulus talks. Asian markets are trading in green on Wednesday as a coronavirus vaccine rollout commenced in the U.K., fueling some of the optimism among investors. Indian markets ended higher Tuesday led by strong gains heavyweight IT stocks and PSU Banks amid mixed global cues. Today, the markets are likely to get an optimistic start tracking firm global cues. Market participants will track developments on the Covid and vaccine front. An expert panel is set to today review the applications of Bharat Biotech, Pfier-BioNTech and Serum Institute of India seeking emergency use authorisation for their vaccines. India's Covid-19 case tally has increased to 97.35 lakh while death toll has mounted to 1.4 lakh, according to Worldometer. Some support will come with Finance Minister Nirmala Sitharaman's statement that India will not worry about missing its budget deficit target as it seeks to step up spending to support the economy. Traders may take note of report that India Ratings and Research expects interest rates to stabilise at the current level and the Indian currency to undergo structural changes. There may be some cautiousness with NITI Aayog CEO Amitabh Kant's statement that it is difficult to carry out tough reforms in India as there is too much of democracy, and emphasised that more reforms need to be done to make the country competitive. He also said it is not easy to compete against China without hard reforms. Auto stocks will be in limelight as automobile dealers' body FADA said passenger vehicle (PV) retail sales in November witnessed a year-on-year increase of 4.17 per cent to 2,91,001 units as Diwali-Dhanteras period led to rise in vehicle registrations. Financials and bank stocks will once again be in focus as the Supreme Court will continue its hearing in the interest waiver case today. There will be some reaction in defence related stocks with report that the Union government on December 8 issued another notification regarding changes in the Foreign Exchange Management Act permitting FDI in defence production up to 74 per cent under the automatic route.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

13,392.95

13,324.19

13,448.59

BSE Sensex

45,608.51

45,381.71

45,788.77

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

State Bank of India

656.18

271.90

266.86

275.31

Tata Motors

421.43

181.80

178.60

185.35

Oil & Natural Gas Corporation

343.27

90.75

89.39

92.79

ITC

308.54

202.45

199.76

204.91

NTPC

303.86

98.20

97.05

100.10

 

  • ICICI Bank has received approval from board of directors for sale up to 7,121,403 equity shares of face value Rs 5 each of ICICI Securities. 
  • RIL's telecom arm -- Reliance Jio Infocomm is planning to launch Jio 5G service in India in the second half of 2021. 
  • NTPC has signed a MoU with IIFM, Bhopal, to implement the Narmada Landscape Restoration Project. 
  • Coal India's production and dispatch are likely to get affected partially on December 08, 2020 as transporters have decided to observe chakka jam, pledging support to the Bharat Bandh called by farmers over the new agriculture laws.
News Analysis