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NSE Intra-day chart (26 March 2020)
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Market Commentary 27 March 2020
Markets to open in green amid positive global cues

 

Indian equity markets traded with volatility throughout the session but in green terrain and finally ended with solid gains on Thursday, as Finance Minister Nirmala Sitharaman announced Rs 1.7 lakh crore PM Gareeb Kalyan scheme to cushion the impact of the lockdown in wake of COVID-19 pandemic. This was the third consecutive day of rise for the domestic markets, settling just shy of their crucial 8,650 (Nifty) and 29,950 (Sensex) levels. Markets made optimistic start and traded higher, as the Department for Promotion of Industry and Internal Trade (DPIIT) has set up a control room to monitor in real-time the status of transportation and delivery of essential commodities amid the coronavirus lockdown in the country. It will also monitor difficulties being faced by various stakeholders during the lockdown period from March 25 to April 14. However, markets witnessed some volatility in early afternoon deals, as traders turned wary with Care Ratings' report that if the 21-day long national lockdown leads to 80 per cent production loss, the economy will take a hit of Rs 35,000-40,000 crore on a daily basis, shaving off Rs 6.3-7.2 trillion cumulatively. It added that Q4 growth may not be negative but can go down to 1.5-2.5%. The economy was slated to grow by Rs 1.74 lakh crore in Q4 or by 4.7%. But, the indices started to rise steadily in final hour of trade, as in order to improve capital base, the Cabinet Committee on Economic Affairs (CCEA) has given its approval for continuation of the process of recapitalization of Regional Rural Banks (RRBs) by providing minimum regulatory capital to RRBs for another year beyond 2019-20, that is, up to 2020-21 for those RRBs which are unable to maintain minimum Capital to Risk weighted Assets Ratio (CRAR) of 9%, as per the regulatory norms prescribed by the Reserve Bank of India. Finally, the BSE Sensex gained 1410.99 points or 4.94% to 29,946.77, while the CNX Nifty was up by 323.60 points or 3.89% to 8,641.45.

 

The US markets ended higher on Thursday, Dow and the S&P 500 settling higher for the third straight day, as investors focused on Senate passage of a $2 trillion stimulus package. The rally on markets came even though the Labor Department released a report showing first-time claims for unemployment benefits soared last week, as large swaths of the US economy were shut down due to the coronavirus pandemic. The Labor Department said initial jobless claims skyrocketed to 3,283,000 in the week ended March 21, an increase of 3,001,000 from the previous week's revised level of 282,000. Street had expected jobless claims to spike to about 1.5 million from the 281,000 originally reported for the previous week. While the increase in unemployment claims is staggering, economists noted the data may still underestimate the number of new claims due to constraints on the capacity of offices to process claims. Meanwhile, a report released by the Commerce Department showed the increase in US gross domestic product in the fourth quarter was unrevised from the previous estimate. The Commerce Department said GDP increased by 2.1 percent in the fourth quarter, unchanged from the estimate provided last month and in line with economist estimates. The unrevised growth came as an upward revision to consumer spending was largely offset by downward revisions to federal government spending and non-residential fixed investment. GDP growth in the fourth quarter was unchanged from the third quarter, as a downturn in imports and an acceleration in government spending were offset by a larger decrease in private inventory investment and a slowdown in consumer spending. 

 

Crude oil futures ended deeply in red on Thursday, snapping 3-day gaining streak, as growing   worries about the decline in energy demand on account of the global COVID-19 pandemic. Oil prices further fell as the International Energy Agency's Executive Director Fatih Birol said the effects of the glut will be felt for years to come, and with three billion people in the world on lockdown, oil demand may fall by as much as 20 million barrels a day. Meanwhile, the US Energy Department withdrew a March 19 tender for the first part of a plan to buy 77 million barrels of oil for the Strategic Petroleum Reserve as the Trump administration failed to win funding for the purchase from Congress. Prices for oil have depreciated 60% since the start of 2020 due to the coronavirus outbreak and aggressive price war between Saudi Arabia and Russia. Crude oil futures for May dropped $1.89 or 7.7 percent to settle at $ 22.60 a barrel on the New York Mercantile Exchange. May Brent crude fell $1.05 or 3.8 percent to settle at $ 26.34 a barrel on London's Intercontinental Exchange.

 

Indian rupee rose sharply against the US dollar on Thursday, amid dollar weakness against a basket of other Asian currencies overseas and strong gains in the domestic stock market. Sentiments remained up-beat after Finance Minister Nirmala Sitharaman announced Rs 1.7 lakh crore PM Gareeb Kalyan scheme to cushion the impact of the lockdown in wake of COVID-19 pandemic. Some support also came as the Department for Promotion of Industry and Internal Trade (DPIIT) has set up a control room to monitor in real-time the status of transportation and delivery of essential commodities amid the coronavirus lockdown in the country. It will also monitor difficulties being faced by various stakeholders during the lockdown period from March 25 to April 14. On the global front, dollar fell further on Thursday ahead of key US data that is expected to show a surge in unemployment benefit claims as companies lay off workers due to the rapid spread of the coronavirus. The last traded price of rupee was 75.16, 78 paise stronger from its previous close of 75.94 on Tuesday.

 

The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 16505.68 crore against gross selling of Rs 20294.22 crore, while in the debt segment, the gross purchase was of Rs 85.77 crore with gross sales of Rs 1021.01 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.66 crore against gross selling of Rs 12.64 crore.

 

The US markets ended higher on Thursday after an eagerly awaited coronavirus relief package cleared the US Senate and headed for the House. Asian markets are trading in green on Friday as investors wagered policymakers will roll out additional stimulus measures to combat the coronavirus pandemic after US unemployment filings surged to a record. Indian markets ended higher for a third straight session on Thursday as investors' sentiment got a boost after Finance Minister Nirmala Sitharaman announced a Rs 1.7 lakh crore Gareeb Kalyan Yojana to help the poor tide over the coronavirus lockdown. Today, the markets are likely to extend their previous session's gains with positive opening taking positive leads from global cues. Investors will be looking ahead to the 10 AM press conference by Reserve Bank of India (RBI) Governor Shaktikanta Das today and his announcements, if any, a day after Finance Minister Nirmala Sitharaman unveiled a Rs 1.7 lakh crore economic welfare package for the poor in the backdrop of the coronavius pandemic. Though, there may be some cautiousness as former chief statistician Pronab Sen said the country's growth in the next two quarters will not be more than 3% due to the lockdown across the country. Traders may be concerned as the severe dent in the economic activity due to the coronavirus pandemic led rating agency Crisil to sharply cut its growth estimate for 2020-21 to 3.5%. Also, SBI Research's Ecowrap report stated that the country's economic growth is likely to fall sharply to 2.6% in 2020-21 due to lockdown amid the coronavirus pandemic. There will be some reaction in banking stocks as ratings agency Fitch said the coronavirus-related worries are likely to aggravate difficulties for Indian banks, and revised down the operating environment score for the critical sector by a notch. Telecom stocks will be in focus as the Department of Telecommunications (DoT) asked operators to provide the Wireless Planning and Coordination Wing (WPC) with details of the amount of spectrum in each circle they would require temporarily. There will be some reaction in reality stocks with a private report that bearing the brunt of COVID-19 pandemic, sales of residential units saw a 42% year-on-year (Y-o-Y) drop in the first quarter of the calendar year 2020. Also, infrastructure stocks will be in limelight as ratings agency ICRA stated that the government's move to stop toll collection amid the 21-days' nationwide lockdown is set to push toll collection into the negative territory for FY 2020, while collection in April, and subsequently FY 2021, is also likely to be adversely impacted. 

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

8,641.45

8,381.22

8,825.37

BSE Sensex

29,946.77

28,975.44

30,509.01

                                                  

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

 

Support  (Rs)

 

Resistance (Rs)

 

(in Lacs)

State Bank of India

1,072.61

192.75

184.90

200.80

ICICI Bank

761.74

330.25

308.20

358.35

ITC

638.23

70.80

68.23

73.43

Tata Motors

629.72

341.40

315.93

382.93

Axis Bank

584.44

156.40

146.63

162.78

 

  • NTPC has added the 2nd Unit of 660 MW of Khargone Super Thermal Power Project to installed capacity. 
  • Cipla has received final approval for its ANDA for Esomeprazole for Oral Suspension 10mg, 20mg and 40mg from the USFDA. 
  • Bharti Airtel is offering free access to thousands of e-books on its platform, Juggernaut Books. 
  • Reliance Industries' promoter Devarshi Commercials LLP has offloaded shares worth over Rs 11,000 crore in the firm through open market transactions on March 25, 2020.
News Analysis