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NSE Intra-day chart (21 June 2021)
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Market Commentary 22 June 2021
Markets to get positive start amid favorable global cues


Indian equity benchmarks staged a smart recovery from intraday low levels on Monday to end the day's trade in the green led by strong buying interest in index heavyweights NTPC, Titan Company, SBI and Hindustan Unilever. The benchmarks made a gap down opening, as traders got anxious with Care Ratings' report that the credit growth for current financial year (FY22) is likely to remain in low double-digit on the back of muted economic activity. The slowdown in economy can further delay anticipated pick-up in credit growth apart from the likely impact on asset quality. Sentiments remained down-beat as private report projected real GDP growth of 8.7 per cent in FY22, down from 11.1 per cent it had forecast earlier. However, it revised up the FY23 forecast from 4 per cent to 5.4 per cent. Some pessimism also came with a private report stated that hiring across sectors declined in May, though the tech industry job market rebounded from the pandemic-induced downturn as many technology companies have been on full expansion mode. There was a 2 percent decline in the overall number of new job posts in May on the SCIKEY Market Network, a job site, including in sectors like banking with a dip of 12 percent, retail 16 percent, and FMCG 12 percent, while there was a growth of 5 percent in the insurance sector. But the markets clawed back above the day's low in late afternoon session and closed in the green, taking support from Chief Economic Advisor (CEA) K V Subramanian stating that the government is open to coming out with more measures to boost the economy which has been hit by the second wave of the coronavirus pandemic. Some support came with a UN report stated that India received $64 billion in Foreign Direct Investment in 2020, the fifth largest recipient of inflows in the world. It also said that the COVID-19 second wave in the country weighs heavily on the country's overall economic activities but its strong fundamentals provide optimism for the medium term. Traders also got some relief with RBI Deputy Governor M K Jain has said that both the central bank and the government have taken steps to mitigate its impact. He also said that the domestic banking system is strong, as per the preliminary data for the quarter ended March 2021. The data suggest that in terms of CRAR that has been improved upon. Besides, foreign portfolio investors (FPIs) pumped in a net Rs 13,667 crore so far in June as Indian markets continued to remain attractive to overseas investors. Finally, the BSE Sensex rose 230.01 points or 0.44% to 52,574.46, while the CNX Nifty was up by 63.15 points or 0.40% to 15,746.50.


The US markets ended sharply higher on Monday. The rebound on markets partly reflected bargain hunting after the steep drop seen last Friday dragged the Dow down to its lowest closing level in well over two months. The Dow closed lower for five straight sessions and tumbled 3.4 percent last week, marking the worst week for the blue chip index since last October. Last week's sell-off came amid concerns about the outlook for monetary policy after the Federal Reserve latest projections called for two interest rates hikes in 2023. Looking ahead, Fed Chair Jerome Powell is scheduled to testify before the House Select Subcommittee on the Coronavirus Crisis on Tuesday. Powell is due to discuss the Fed's response to the pandemic but could also face questions about the outlook for monetary policy. On the sectoral front, Energy stocks turned in some of the market's best performances on the day, moving sharply higher along with the price of crude oil. Crude for July delivery spiked $2.02 to $73.66 a barrel. Reflecting the strength in the energy sector, the Philadelphia Oil Service Index skyrocketed by 5.5 percent, the NYSE Arca Oil Index soared by 4.6 percent and the NYSE Arca Natural Gas Index surged up by 3.5 percent. Substantial strength was also visible among banking stocks, as reflected by the 2.9 percent jump by the KBW Bank Index. The index rebounded off a two-month closing low. Steel stocks also saw significant strength on the day, with the NYSE Arca Steel Index shooting up by 2.6 percent after ending the previous session at its lowest closing level in two months.


Crude oil futures ended higher on Monday on rising optimism about energy demand and easing worries about excess supply. Thanks to the reopening of economies in the US and the relaxation of restrictions in several countries in Europe and some other parts of the world, the outlook for energy demand has turned positive. Further, worries about possible excess supply in the oil market eased after the latest talks between world powers and Iran to revive a nuclear deal ended without an agreement. Besides, the dollar's weakness against other major currencies also contributed to the rise in oil prices. The dollar index dropped by over 0.4% to 91.83 today. Crude oil futures for July surged $2.02 or 2.8 percent to settle at $73.66 barrel on the New York Mercantile Exchange. August Brent crude rose $1.25 or 1.7 percent to settle at $74.75 a barrel on London's Intercontinental Exchange.


Indian rupee ended significantly lower on Monday following Federal Reserve official Jim Bullard's hawkish comments that suggested the first interest rate hike by the US central bank could come as early as the end of 2022. Sentiments were also downbeat as Care Ratings said that the credit growth for current financial year (FY22) is likely to remain in low double-digit on the back of muted economic activity. The slowdown in economy can further delay anticipated pick-up in credit growth apart from the likely impact on asset quality. On the global front, sterling edged higher on Monday after falling overnight to its lowest level since April as the currency remained vulnerable since the US Federal Reserve surprised the market with a hawkish tone last week. Finally, the rupee ended 74.10, weaker by 24 paise from its previous close of 73.86 on Friday.


The FIIs as per Monday's data were net buyer in equity segment. In equity segment, the gross buying was of Rs 19268.38 crore against gross selling of Rs 16636.10 crore, while in the debt segment, the gross purchase was of Rs 132.32 crore with gross sales of Rs 894.75 crore. Besides, in the hybrid segment, the gross buying was of Rs 59.35 crore against gross selling of Rs 62.95 crore.


The US markets ended higher on Monday as speculation the Federal Reserve will tighten policy at a gradual pace outweighed concern about the central bank's hawkish pivot. Asian markets are trading mostly in green on Tuesday following big gains overnight for the DJIA on Wall Street. Indian markets staged a smart recovery to end higher on Monday after falling over a percent in intra-day deals. Gains were led by banking, metals and energy with PSU Banks rallying the most. Today, the start of session is likely to be positive amid favorable global cues. Sentiments will get a boost with report that India reported 39,000 Covid cases, the lowest since March 18. The pace of vaccination also picked up, boosting expectations of a faster economic recovery. On Monday, India administered a record 8.1 million doses as the central government-led free for all vaccination drive kicked off. Some support will come as the survey conducted by Ficci showed that with states easing lockdown curbs due to declining number of COVID-19 cases, there are immediate indications of improvement in economic activity as companies are hopeful of better performance in the next 6 to 12 months. Also, the RBI data showed that bank credit grew by 5.74 per cent to Rs 108.43 lakh crore and deposits rose by 9.73 per cent to Rs 153.13 lakh crore in the fortnight ended June 4, 2021. Banking stocks will be in limelight with ICRA's report that public sector Banks, which reaped windfall treasury gains in FY21, are likely to see much lower gains in their bond portfolios in FY22 due to limited headroom for yields to decline further. There will be some buzz in auto stocks as industry chamber FICCI said the recent changes in the FAME II scheme, including enhanced subsidies for electric two-wheelers, are expected to accelerate demand for electric vehicles in the two-wheelers, three-wheelers and bus segments. Real estate industry stocks will be in focus with data released by RBI showing that all India Housing Price Index (HPI) increased 2.7 per cent year-on-year in March quarter 2020-21. There will be some reaction in cement industry stocks with a private report stating that pandemic-hit FY21 has turned out to be a good year for the big cement companies, as their net profits surged and market position strengthened. Meanwhile, the oil marketing companies (OMCs) hiked the prices of petrol and diesel by 27-28 paise and 26-28 paise respectively on Tuesday after keeping the rates unchanged on Monday.


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



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  • HDFC Bank's board has given its approval to buy more than 3.55 crore shares in group firm HDFC ERGO General Insurance Company for over Rs 1,906 crore from HDFC. 
  • Tata Power Company and Tata Motors have inaugurated India's largest Solar Carport in Pune that is estimated to reduce 7,000 tons of carbon emissions annually.  
  • ICICI Bank has introduced the instant Cardless EMI facility to online purchases made on e-commerce platforms. 
  • NTPC has reported around 3-fold jump in its consolidated net profit attributed to shareholders at Rs 4,541.79 crore for Q4FY21 as compared to Rs 1,534.70 crore for Q4FY20.
News Analysis