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NSE Intra-day chart (09 July 2021)
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Market Commentary 12 July 2021
Benchmarks to make firm opening following strong global cues


Indian equity benchmarks ended lower for second straight session on Friday, tracking the decline in global peers amid concerns that the spread of covid variants could disrupt economic recovery. The benchmarks opened lower and traded with a negative bias throughout the day, as traders got anxious with a private report that southwest monsoon has practically stalled over most parts of the country since June 19. This has not only delayed its progress over north India but has also badly impacted the sowing of the kharif crop. Some concern also came amid reports that inflows into equity mutual funds dropped sharply by 40 per cent to Rs 5,988 crore in June on profit booking by investors as stock markets witnessed sharp rallies in recent times. In comparison, the equity mutual funds saw a net inflow to the tune of Rs 10,083 crore in May, the highest fund infusion in 14 months, data from the Association of Mutual Funds in India showed on Thursday. Benchmarks continued their weak trade in afternoon session, as foreign institutional investors (FIIs) stood as net sellers in the capital market as they offloaded shares worth Rs 554.92 crore on Thursday, as per provisional exchange data. Traders also got worried after Care Ratings' report said that significant rise in prices of petrol and diesel in many Indian states, commodities such as edible oils, foodgrain, vegetables are seeing some inflation too. High petrol and diesel prices impact Wholesale Price Index (WPI) and Consumer Price Index (CPI), pushing up commodity prices, and that can be more damaging. The impact of fuel price hike is such that it percolates into prices of other goods by way of transport, logistics and freight costs. However, markets recouped some losses ahead of the closing bell as some support came from Industry chamber PHDCCI's statement that the gradual receding of the second wave of the COVID-19 pandemic has created scope for the economy to recover from the daunting impact witnessed in April and May 2021. Finally, the BSE Sensex fell 182.75 points or 0.35% to 52,386.19, while the CNX Nifty was down by 38.10 points or 0.24% to 15,689.80.


Wiping out the previous session losses, the US markets ended sharply higher on Friday as traders quickly shrugged off the concerns about the global economy that weighed on the markets in early trading on Thursday. The major averages reached new highs for the session going into the close. Despite worries about the spread of the delta variant of the coronavirus, traders seem optimistic the US economy will continue to outperform. A rebound by treasury yields also generated buying interest, with the yield on the benchmark ten-year note bouncing off its lowest closing level since February. Yields had fallen sharply in recent sessions amid indications the Federal Reserve is not in a hurry to begin scaling back its asset purchase program. On the sectoral front, steel stocks turned in some of the market's best performances on the day, resulting in a 4.1 percent spike by the NYSE Arca Steel Index. The rebound by treasury yields also contributed substantial strength among banking stocks, driving the KBW Bank Index up by 3.9 percent. Oil service stocks also moved sharply higher over the course of the session, resulting in a 2.8 percent spike by the Philadelphia Oil Service Index. The index bounced off its lowest closing level in over a month. The rally by oil service stocks came amid sharp increase by the price of crude oil. Meanwhile, traders were looking ahead to the reports on consumer and producer price inflation, industrial production and retail sales in next week.


Extending gains from the previous session, crude oil futures settled higher on Friday, as the commodity continued to benefit from data showing a bigger than expected drop in U.S. crude inventories last week. Data released by US Energy Information Administration (EIA) on Thursday showed crude inventories in the country fell by 6.866 million barrels last week, far more than the expected drop of about 4.03 million barrels, thanks to the ongoing recovery in consumption that's underpinned this year's crude rally. Traders overlooked concerns about possible excess supply in the market in the near term following the Organization of the Petroleum Exporting Countries and their allies failing to agree on output policy. Meanwhile, according to a report released by Baker Hughes, the number of oil and gas rigs in the United States increased by 4 this week to 479, up 221 from the same time last year. Oil rig count rose by 2 to 378, while the number of gas rigs increased by 2 to 101. Crude oil futures for August rose $1.62 or about 2.2percent to settle at $74.56 barrel on the New York Mercantile Exchange. September Brent crude gained $1.43 or nearly 2 percent to settle at $75.55 a barrel on London's Intercontinental Exchange.


Indian rupee ended higher against dollar on Friday, on the back of selling of the American currency by exporters. Traders were getting support with Industry chamber PHDCCI stating that the gradual receding of the second wave of the COVID-19 pandemic has created scope for the economy to recover from the daunting impact witnessed in April and May 2021. However, gains remain capped as some cautiousness came in with a private report that Southwest monsoon has practically stalled over most parts of the country since June 19. This has not only delayed its progress over north India but has also badly impacted the sowing of the kharif crop. On the global front, dollar fell on Thursday from a three-month high against a basket of peers, with the euro getting a boost as investors unwound bets on risky currencies and as concerns over the spread of COVID variants increased the demand for safe havens. Finally, the rupee ended 74.63, stronger by 8 paise from its previous close of 74.71 on Thursday.


The FIIs as per Friday's data were net seller in equity segment, while net buyer in debt segment. In equity segment, the gross buying was of Rs 5295.98 crore against gross selling of Rs 5936.79 crore, while in the debt segment, the gross purchase was of Rs 424.56 crore with gross sales of Rs 322.98 crore. Besides, in the hybrid segment, the gross buying was of Rs 20.01 crore against gross selling of Rs 14.21 crore.


The US markets ended higher on Friday as financials and other economically focused sectors rebounded after a selloff sparked by growth worries earlier in the week. Asian markets are trading in green on Monday as record highs on Wall Street and policy easing in China helped calm some of the recent jitters on global growth, though plenty of potential pitfalls lay ahead this week. Indian markets fell for the second day in a row on Friday pushing the Nifty50 below 15700 levels amid cautious global sentiment. Today, the markets are likely to make firm opening following strong global cues. Traders will be taking encouragement as Niti Aayog Vice Chairman Rajiv Kumar the economy will register a double-digit growth in the current fiscal and the disinvestment climate also looks better, with India's story remaining very strong. He also asserted that the country is prepared in a far better manner in case there is a Covid wave as states have also their own lessons from the previous two waves. Some support will come as the Confederation of Indian Industries (CII) Chief Executive Officers (CEOs) poll of 119 top corporates showed that recovery from the second wave of the pandemic in April-May is expected to be swifter as compared to the first wave in 2020. Traders may take note of report that India has recorded 37,676 fresh cases taking the total caseload to 30,873,907, according to Worldometer. The death count increased to 408,792 with 720 new fatalities, the data showed. Meanwhile, after reaching a historic high, the diesel prices decreased by 15 to 17 paise on July 12. However, the price of petrol were hiked again by 25 to 34 paise on the day, taking the prices across the country to another high. There will be some buzz in oil & gas industry stocks with data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas showing that India's fuel consumption rose 1.5 percent to 16.33 million tonnes in June from a year earlier and by 8 percent over May 2021. Power stocks will be in focus as power ministry data showed that India's power consumption grew nearly 18 per cent in first week of July to 30.33 billion units (BU) compared to a year ago and returned to pre-pandemic level mainly due to easing of lockdown curbs and delayed monsoon. There will be some reaction in financial stocks as Icra said the restructured loan books of non-bank financial entities are expected to double to 3.1-3.3 per cent by March 2022 from 1.6 per cent in March 2021 as the second wave of the pandemic hit borrowers.


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



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  • Tata Motors has inked a two-year MoU with Jammu & Kashmir Bank, in a collaborative effort to offer financing options to its customers. 
  • Axis Bank and NIIT Institute of Finance Banking and Insurance have launched a fintech professional programme to build future-ready professionals for the private sector lender. 
  • HCL Technologies has entered into a five-year, global agreement to provide digital transformation and managed services to The Mosaic Company. 
  • Tech Mahindra has entered into the Managed Security Services Provider partnership with Palo Alto Networks, a global cybersecurity leader.  
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