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NSE Intra-day chart (31 August 2021)
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Market Commentary 01 September 2021
Markets likely to open in slightly in green amid mixed global cues


Bulls continued to pull Indian equity benchmarks higher on Tuesday, setting fresh record closing highs, driven by gains in Bharti Airtel, Bajaj Finance and Bajaj Finserv amid positive global cues. After making positive start, key gauges turned cautious ahead of GDP numbers. The National Statistical Office will release the GDP numbers for the April-June quarter on August 31, 2021. RBI MPC in its August 06, 2021 resolution said that it expects June quarter GDP to grow at 21.4 per cent. However, markets soon regained traction and traded in fine fettle taking support from commerce ministry's data showing that exports from special economic zones (SEZs) grew by about 41.5 per cent to Rs 2.15 lakh crore during the April-June quarter of the current fiscal on account of healthy growth in pharmaceuticals, engineering, and gems and jewellery sectors. Traders took note of report that Niti Aayog has suggested to the government to provide tax incentives for investment in InvITs, and bring them under the IBC to attract retail as well as institutional investors to achieve the goals of the National Monetisation Pipeline scheme. The rally in Indian equity markets also received support from private report that India's economy is expected to have grown in double digits during the April-June quarter of this financial year, helped by a low base of the previous year. The expected rebound in economic growth would also stand testament to the strong consumer activity, unfazed by the second wave of the covid-19 pandemic. First-quarter GDP numbers schedule to be release today. Traders also remain energized with another private report stating that the overall hiring activity in India has touched pre-pandemic level and going ahead consumption economy will play an important role in driving job growth further. Adding more optimism, a private report stated that business resumption activity continued its northward journey and reached a new high, much above the pre-pandemic levels for the week ended August 29. The Nomura India Business Resumption Index rose to 102.7 for the week ending 29 August from 101.3 in the prior week. Finally, the BSE Sensex rose 662.63 points or 1.16% to 57,552.39, while the CNX Nifty was up by 201.15 points or 1.19% to 17,132.20.


The US markets ended lower on Tuesday  on profit taking contributed to weakness on Wall Street after the S&P 500 and the Nasdaq ended Monday's trading at new record closing highs.  Weakness also prevailed in the markets as the Conference Board showed a substantial deterioration in US consumer sentiment in the month of August. The Conference Board said its consumer confidence index tumbled to 113.8 in August from a downwardly revised 125.1 in July. Street had expected the consumer confidence index to drop to 123.0 from the 129.1 originally reported for the previous month. With the bigger than expected decrease, the index slumped to its lowest level since hitting 95.2 in February of 2021. Concerns about the Delta variant-and, to a lesser degree, rising gas and food prices-resulted in a less favorable view of current economic conditions and short-term growth prospects, said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. She added while the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead.


Crude oil futures ended lower on Tuesday amid concerns about likely excess supply in the market with OPEC and allies set to increase production, and the restoration of crude output in the US after Hurricane Ida. The Organization of the Petroleum Exporting Countries (OPEC) and its allies are set to meet on Wednesday. It is widely expected that the group will agree to proceed with plans to add another 400,000 barrels per day of supply each month through December. Further, weak Chinese economic data weighed as well on crude oil prices. China's service sector contracted in August amid the renewed virus flare-up, official survey results from the National Bureau of Statistics showed. Crude oil futures for October fell 71 cents or about 1 percent to settle $68.50 barrel on the New York Mercantile Exchange. November Brent crude dropped 60 cents or about 0.8% percent to settle at $71.63 a barrel on London's Intercontinental Exchange.


Indian rupee continued its upward momentum for the third day and ended fairly higher against US dollar on Tuesday following dovish comments by the US Federal Reserve chairman on interest rates. A strong rally in the domestic equity markets and weak American currency in the overseas markets also supported the rupee sentiment. Sentiments got boost with private report that India's economy is expected to have grown in double digits during the April-June quarter of this financial year, helped by a low base of the previous year. First-quarter GDP numbers schedule to be release today. On the global front; dollar was trading near three-week lows against a basket of currencies on Tuesday, as investors looked to U.S. jobs figures later this week for clues on stimulus taper timing. Finally, the rupee ended 73.00, stronger by 29 paise from its previous close of 73.29 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 10317.04 crore against gross selling of Rs 8602.58 crore, while in the debt segment, the gross purchase was of Rs 536.97 crore against gross selling of Rs 258.35 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.22 crore against gross selling of Rs 11.80 crore.


The US markets ended in red on Tuesday as traders seemed worried about missing out on further upside. Asian markets are trading mixed on Wednesday as worries about slowing global growth in several markets returned to weigh on traders' minds. Indian markets ended at fresh record highs on Tuesday led by gains in metals and financial stocks amid mixed global cues. Today, start of session is likely to be flat-to-positive amid mixed global cues. Markets may remain volatile amid a host of regulatory and macro-economic triggers. Also, bouts of volatility could be on cards as phase-IV of Sebi's peak margin norms kick in today. As per the rules, intra-day traders will have to pay 100 per cent upfront margin instead of 75 per cent asked previously. Traders will be getting encouragement as India's economy grew by 20.1 per cent in the first quarter of 2021-22, helped by a low base of the year-ago period. According to data released by the National Statistical Office (NSO), the gross domestic product (GDP) had contracted by 24.4 per cent in the corresponding April-June quarter of 2020-21. Some support will come as Chief Economic Advisor (CEA) K V Subramanian said that India's economy is all set for robust growth on the back of government's capex push, structural reforms, rapid inoculation and financial sector cleanup and activities would recover to pre-Covid levels by the next year. Sentiments will get a boost as Moody's Investors Service said the economic activity in India is picking up with the gradual easing of COVID restrictions and there could be further upside to growth as economies around the world gradually reopen. Additionally, the government data stated that high tax collections due to tighter rules for the goods and services tax (GST), and an economy on the recovery path coupled with expenditure compression resulted in the Centre's fiscal deficit narrowing to 21.3 per cent of the Budget Estimates (BE) in the first four months of the current financial year. Besides, India's output of eight core industries grew 9.4 per cent year-on-year (YoY) in July on the back of a low base as all sectors, except crude oil, registered an increase in output. Traders may take note of private report that Economic recovery will continue to need both fiscal and monetary policy support, and while the global recovery may help exports, the government will have to act swiftly in correcting the protectionist stance and fast-tracking trade agreements. Auto stocks will also be in focus today as the automobile companies are set to report their August sales figures. there will be some reaction in aviation industry stocks as credit ratings agency ICRA said pandemic-hit Indian aviation industry is expected to report a net loss of Rs 25,000-26,000 crore while its debt level may increase to Rs 1.2 lakh crore in the ongoing fiscal year. Meanwhile, Two IPOs - Ami Organics and Vijaya Diagnostic Centre - will open for subscription on Wednesday, 1 September 2021. Both the IPOs look to raise Rs 2,465 crore cumulatively.


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



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Nifty Top volumes





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