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NSE Intra-day chart (29 December 2020)
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FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
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DII Investments(Rs. Cr)
DateBuy ValueSale ValueNet Value
 
Market Commentary 30 December 2020
Benchmarks to open in green on Wednesday

 

Indian equity benchmarks ended the day in the positive territory for the fifth straight session and settled at record closing highs on Tuesday, with major contribution from Banking, Finance and IT stocks. The benchmarks staged a gap up opening, as traders took encouragement with FICCI's report stated that India could benefit from the likely shift in global supply chains from China to other economies in the aftermath of the COVID-19 pandemic, likely to boost sentiments in markets. Sentiments remained positive as the Finance Ministry released the ninth installment of Rs 6,000 crore to the states to meet GST compensation shortfall, taking the total amount of fund released to Rs 54,000 crore. The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. Market participants also took a note of Reserve Bank of India (RBI) paper stating that maintaining the inflation target at 4 percent is appropriate for India as targeting a lower rate could impart deflationary bias to the monetary policy. It said under the current dispensation, the RBI has been mandated by the government to maintain retail inflation at 4 percent with a margin of 2 percent on either side. However, domestic indices trimmed some of their gains in late morning deals, as some anxiety remained among traders with the rating agency ICRA's report that banks' gross non-performing assets (NPAs) and net NPAs are expected to rise to 10.1-10.6 percent and 3.1-3.2 percent, respectively by March 2021 from 7.9 percent and 2.2 percent, respectively as of September 2020. But, local gauges regained traction to end higher, taking support from report of UN stating that the India's economy could prove to be the most resilient in the subregion of South and South-West Asia over the long term, the positive but lower economic growth post COVID-19 pandemic and the country's large market will continue to attract investments. The growth, however, was mainly driven by India, which accounted for 77 percent of the total inflows and received $51 billion in 2019, up 20 percent from the previous year. Adding optimism, Union minister Nitin Gadkari said that the Micro, Small and Medium Enterprises Ministry is contemplating fresh plans and laws to find a solution of the receivables issue as outstanding dues are creating working capital problem for the sector. Finally, the BSE Sensex rose 259.33 points or 0.55% to 47,613.08, while the CNX Nifty was up by 59.40 points or 0.43% to 13,932.60.

 

The US markets ended lower on Tuesday as traders looked to cash in on the recent strength in the markets, leading to the pullback by the major averages. Traders also kept an eye on the latest developments in Washington after President Donald Trump signed a coronavirus relief and government spending bill over the weekend. Trump has called for the direct payments included in the bill to be increased to $2,000 from $600, and the House voted Monday to approve a measure increasing the size of the stimulus checks. However, Senate Majority Leader Mitch McConnell, R-Ken., blocked an effort by Senate Minority Leader Chuck Schumer, D-N.Y., to unanimously approve the House bill. The choppy trading seen on the day reflected light volume, as many traders remained away from their desks ahead of the New Year's Day holiday on Friday. A lack of major US economic data also kept some traders on the sidelines ahead of the release of reports on pending home sales and weekly jobless claims in the coming days. Besides, networking stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Networking Index down by 1.7 percent. The index pulled back after reaching its best intraday level in almost twenty years.  

 

Crude oil futures ended higher on Tuesday amid hopes energy demand will pick up in the event of the US policymakers deciding to provide additional stimulus to boost economic growth. Traders were also reacting to reports saying crude oil inventories in the US may have dropped in the week ending December 25th. Private report said oil stockpiles may have dropped last week. The report said crude stocks likely fell by 2.1 million barrels in the week. However, the re-imposition of movement restrictions in the U.K. and several parts of Europe and Africa due to the spread of a new variant of the coronavirus remains a major concern. Crude oil futures for February rose $0.38 or 0.8 percent to settle at $48.00 a barrel on the New York Mercantile Exchange. February Brent crude gained $0.36 or 0.7 percent to settle at $51.26 a barrel on London's Intercontinental Exchange.

 

Rising for the second consecutive day, Indian rupee ended higher against dollar on Tuesday amid weak dollar in overseas markets. Traders were getting comfort with report of UN stating that the India's economy could prove to be the most resilient in the subregion of South and South-West Asia over the long term, the positive but lower economic growth post COVID-19 pandemic and the country's large market will continue to attract investments. The growth, however, was mainly driven by India, which accounted for 77 percent of the total inflows and received $51 billion in 2019, up 20 percent from the previous year. Market participants also took a note of Reserve Bank of India (RBI) paper stating that maintaining the inflation target at 4 percent is appropriate for India as targeting a lower rate could impart deflationary bias to the monetary policy. On the global front, dollar languished near a 2-1/2-year low on Tuesday as investors were encouraged to take on more risk as U.S. lawmakers pushed forward with an enhanced COVID-19 relief package. Finally, the rupee ended at 73.42, 7 paise stronger from its previous close of 73.49 on Monday.

 

The FIIs as per Tuesday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 3456.25 crore against gross selling of Rs 1754.58 crore, while in the debt segment, the gross purchase was of Rs 420.09 crore with gross sales of Rs 311.93 crore. Besides, in the hybrid segment, the gross buying was of Rs 73.16 crore against gross selling of Rs 77.56 crore.

 

The US markets ended lower on Tuesday as uncertainty about whether the US Senate would authorize additional stimulus checks gave investors a reason to take profits. Asian markets are trading mostly higher on Wednesday amid report that China and the European Union are likely to clinch a deal this week. Indian markets ended higher Tuesday led by gains in banks, financial and IT stocks. Today, the markets are likely to make positive start tracking Asian peers. Some support will come as the government approved the 15th tranche of electoral bonds which will be open for sale between January 1 and January 10. Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding. Traders may take note of report that foreign institutional investors (FIIs) net bought shares worth Rs 2,350 crore, whereas domestic institutional investors (DIIs) net sold shares worth Rs 2,020 crore in the Indian equity market on December 29, as per provisional data available on the NSE. However, there may be some cautiousness as India witnessed a slight rise in fresh Covid cases with 20,529 cases. India's caseload now stands at 10,245,326. India had reported six cases of new coronavirus variant. But the government on Tuesday said the existing vaccines for Covid-19 will protect against the new variants as there is no evidence to prove otherwise. Banking and financial stocks may remain in focus after the RBI in a report said that India's financial sector should brace for challenging times ahead with an increased risk of deterioration in asset quality and lower demand for loans. The report said NBFCs or shadow banks may see a hit on their profitability. There will be some reaction in auto component industry stocks as ratings agency ICRA said it has revised its outlook on the auto component industry from negative to stable, on the back of demand revival across original equipment manufacturers (OEMs), replacements and exports.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

13,932.60

13,872.46

13,980.16

BSE Sensex

47,613.08

47,411.81

47,764.46

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Motors

713.18

183.45

180.21

187.56

State Bank of India

450.32

277.90

275.10

280.30

ITC

265.46

211.55

209.94

213.34

NTPC

236.47

98.60

97.35

100.45

Coal India

211.46

135.10

133.26

138.26

 

  • ICICI Bank has collaborated with Google Pay for issuance of FASTag through UPI on the payments app. 
  • L&T's construction arm -- L&T construction has been awarded contract for its Water & Effluent Treatment Business. 
  • Bajaj Finserv, through its lending and investment arm Bajaj Finance, is offering customers instant personal loans that can be availed online. 
  • Tata Motors is all set to unveil Gravitas SUV on January 26, 2021.
News Analysis