Indian equity
benchmarks closed with gains of over half percent on Monday paced by strong
buying interest in index heavyweights Titan Company, Mahindra & Mahindra
and Reliance Industries. Strong trend in other global markets also added to
bullish sentiment. Benchmarks opened a day with good gap and managed to hold
bullish stream throughout day, as Goods and Services Tax (GST) mop-up grew 33
percent year-on-year in July to over Rs 1.16 lakh crore, indicating that the
economy is recovering at a fast pace. This is the second highest collection so
far this fiscal after a record Rs 1.41 lakh crore mop-up in April. Sentiments
got the boost as the growth of eight core infrastructure industries grew by 8.9
percent in June 2021 as compared to same month last year, mainly due to a low
base effect and uptick in production of natural gas, steel, coal and
electricity. Some support also came with commerce Minister Piyush Goyal's
statement that India and the US are 'natural partners' and services trade will
play a critical role in ever-expanding business ties. The minister also said
that the services sector holds a lot of promise in aiding India's economic
recovery in the post Covid period. Markets sentiment remained bullish in the
afternoon session after India's manufacturing sector activities witnessed the
strongest rate of growth in three months in July amid improved demand
conditions and easing of some local COVID-19 restrictions. The seasonally
adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) rose
from 48.1 in June to 55.3 in July, pointing to the strongest rate of growth in
three months. Traders also remained optimistic after India's unemployment rate
fell to a four-month low of 6.95% in July, staging a near-complete recovery in
all parameters of the labour markets, which were hit by the second wave of the
pandemic. The labour participation rate, unemployment rate and employment rate
have all bounced back to close to their March 2021 levels. Meanwhile, data
released by the Controller General of Accounts (CGA) showed that the central
government's fiscal deficit stood at Rs 2.74 trillion or 18.2 per cent of the
full year's Budget estimate at the end of June. The fiscal deficit at the end of
June 2020 was 83.2 per cent of the Budget Estimates (BE) of 2020-2 at Rs 6.62
trillion, after a fall in tax receipts due to pandemic lockdown that led to the
worst recession in seven decades. Finally, the BSE Sensex rose 363.79 points or
0.69% to 52,950.63, while the CNX Nifty was up by 122.10 points or 0.77% to
15,885.15.
The US markets ended mostly lower
on Monday after a report from the Institute for Supply Management (ISM) showed
an unexpected slowdown in the pace of growth in US manufacturing activity in
the month of July. The ISM said its manufacturing PMI dipped to 59.5 in July
from 60.6 in June. While a reading above 50 still indicates growth in the
manufacturing sector, street had expected the index to inch up to 60.9.
Meanwhile, a report released by the Commerce Department showed a modest
increase in US construction spending in the month of June. The Commerce
Department construction spending crept up by 0.1 percent to an annual rate of
$1.552 trillion in June after edging down by 0.2 percent to a revised rate of
$1.551 trillion in May. Street had expected construction spending to increase
by 0.4 percent compared to the 0.3 percent dip originally reported for the
previous month. However, the early strength on markets partly reflected recent
upward momentum, which has helped lift stocks to new record highs despite
concerns about the spread of the delta variant of the coronavirus. Traders
remained optimistic about the outlook for the economy amid indications the
Federal Reserve is not in a hurry to begin scaling back stimulus. Positive
sentiment have also been generated after a bipartisan group of Senators
unveiled a nearly $1 trillion infrastructure package.
Crude oil futures ended deeply in
red on Monday on rising concerns about the outlook for energy demand after
disappointing data on activity in China and the US, worries about the spread of
the delta variant of the coronavirus that causes COVID-19 and rising output by
OPEC+ producers. In China, data released by the National Bureau of Statistics showed
the country's official purchasing managers index fell to 50.4 in July from 50.9
in June. Numbers above 50 indicate expansion. Crude oil futures for September
fell $2.69 or 3.6 percent to settle $71.26 barrel on the New York Mercantile
Exchange. October Brent crude dropped $2.52 or 3.3 percent to settle at $72.89
a barrel on London's Intercontinental Exchange.
Erasing previous session losses,
Indian rupee ended higher against dollar on Monday, on persistent selling of
the American currency by exporters. Sentiments were upbeat as India's
manufacturing sector activities witnessed the strongest rate of growth in three
months in July amid improved demand conditions and easing of some local
COVID-19 restrictions. The seasonally adjusted IHS Markit India Manufacturing
Purchasing Managers' Index (PMI) rose from 48.1 in June to 55.3 in July,
pointing to the strongest rate of growth in three months. On the global front,
dollar lurched lower on Monday, back towards the one-month lows hit last week
when it became clear the Fed was in no hurry to tighten policy, and
policymakers broadly shared Chairman Jerome Powell's view that rate rises were
a ways away. Finally, the rupee ended 74.34, stronger by 8 paise from its
previous close of 74.42 on Friday.
The FIIs as per Monday's data
were net seller in equity segment, while net buyer in debt segment. In equity
segment, the gross buying was of Rs 9797.13 crore against gross selling of Rs
12355.01 crore, while in the debt segment, the gross purchase was of Rs 226.09
crore with gross sales of Rs 110.15 crore. Besides, in the hybrid segment, the
gross buying was of Rs 101.20 crore against gross selling of Rs 10.14 crore.
The US markets ended mostly lower
on Monday on concerns about the Delta variant of the coronavirus. Asian markets
are trading mostly in red on Tuesday ahead of the Reserve Bank of Australia's
latest interest rate decision. Indian markets ended higher on Monday led by
gains in auto, IT and realty stocks amid positive global cues. Today, domestic
indices are staring at a negative opening following weakness in global peers.
There will be some cautiousness as a periodic labour force survey by the
National Statistical Office (NSO) showed that unemployment rate rose to 13.3
per cent in July-September 2020 as compared to 8.4 per cent in the year-ago
period. Joblessness or unemployment rate (UR) is defined as the percentage of
unemployed persons in the labour force. The UR was 20.9 per cent in April-June
2020, the eighth Periodic Labour Force Survey (PLFS) showed. However, some
respite may come as preliminary data released by the commerce and industry
ministry showed merchandise exports grew 48 per cent YoY in July to $35.17
billion on account of a rise in global orders in shipments of petroleum
products, engineering products, gems and jewellery segments. On a sequential
basis, outbound shipments witnessed an 8 per cent jump and grew over 34 per
cent as compared to July 2019. Also, a private report stated that Bharat
Biotech's Covaxin is effective against the Delta and Delta plus variants.
Weekly indicators of economic activity in India are showing signs of
improvement as new Covid-19 cases increase. Metal stocks will be in focus as
the country's steel output took a hit during the April-June period of 2021 due
to the emergence of the second wave of Covid-19 pandemic. Union Steel Minister
Ram Chandra Prasad Singh said during the second wave of pandemic, the public
and private sector steel plants together supplied 2,30,262 tonnes of liquid
medical oxygen (LMO) between April 1 to July 25, 2021. There will be lots of
important earnings announcements too, to keep the markets in action. Meanwhile,
riding on huge investor interest in the healthcare sector, five pharma
companies are tapping the initial public offering (IPO) market over the next
couple of weeks to raise over Rs 8,000 crore. The list includes the Rs
4,000-crore IPO by the Bain Capital-backed Emcure Pharma, the Rs 1,500-crore
issue by Vijaya Diagnostic Centre, diagnostic firms Krsnaa Diagnostics (Rs
1,200 crore) and Supriya Lifesciences (Rs 1,200 crore), and Windlass Biotech's
Rs 400 crore issue.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,885.15
|
15,848.90
|
15,907.15
|
BSE
Sensex
|
52,950.63
|
52,660.77
|
53,113.63
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
192.73
|
296.85
|
295.16
|
298.96
|
Sun Pharmaceutical Industries
|
186.61
|
775.00
|
758.76
|
796.56
|
State Bank of India
|
169.26
|
434.90
|
432.24
|
437.14
|
Indian Oil Corporation
|
133,.12
|
105.50
|
104.15
|
106.35
|
NTPC
|
117.42
|
117.75
|
116.91
|
118.66
|
HDFC has reported a rise of 39.51% in its consolidated net profit attributed to the owners of the corporation at Rs 5,041.17 crore for Q1FY22 as compared to Rs 3,613.60 crore for Q1FY21.
Tata Motors' wholly owned subsidiary -- Jaguar Land Rover has commenced bookings for new Jaguar F-TYPE R-Dynamic Black in India.
Tata Steel Kalinganagar, the state-of-the-art steel plant located in Jajpur District of Odisha, has introduced a new Robotic system for its Wagon Tippler operation.
TCS has helped Wabtec Corporation successfully complete the complex post-merger integration of GE Transportation's core systems within the stipulated time.