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NSE Intra-day chart (03 August 2021)
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Market Commentary 04 August 2021
Markets likely to make positive start tracking gains in global peers


Gaining for the second straight session, Indian equity benchmarks ended at a record closing high on Tuesday, on hopes of faster pace of economic recovery as various macro-economic indicators pointed towards demand revival in the economy. Markets made positive start, 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. Adding more optimism, Finance Minister Nirmala Sitharaman states that the government's net tax revenues grew 5 per cent in the fiscal year ended March 31, 2021 (FY21). The net tax (sum of direct and indirect taxes) revenue in 2020-21 was over Rs 14.24 lakh crore, a nearly 5 per cent growth from Rs 13.56 lakh crore in the previous financial year. Benchmarks continued their upward rally in late afternoon session, as better than expected corporate earnings in June quarter added to the bullish investors' sentiment. Adding the optimism among the market participants, markets regulator Sebi has reduced the minimum application value of REITs and InvITs, and revised trading lot to one unit for these emerging investment instruments to make them attractive for retail investors. The minimum application value has been cut down to the range of Rs 10,000-15,000 for both REITs and InvITs, compared to the earlier requirement of Rs 50,000 for REITs and Rs 1 lakh for InvITs, Sebi said in two separate notifications dated July 30. Investors didn't give any heed to the National Statistical Office's (NSO) periodic labour force survey stated that unemployment rate rose to 13.3 percent in July-September 2020 as compared to 8.4 percent 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. Finally, the BSE Sensex rose 872.73 points or 1.65% to 53,823.36, while the CNX Nifty was up by 245.60 points or 1.55% to 16,130.75. 


The US markets ended higher on Tuesday as traders shrugged off concerns about the rapid spread of the delta variant of the coronavirus amid continued optimism about the economic outlook. Data from the Centers for Disease Control and Prevention has shown a jump in new coronavirus cases in the US in recent weeks, with the seven-day moving average of new cases reaching 72,790 last Friday, surpassing the peak seen last summer. However, the increase has also seeming led to more Americans getting vaccinated, with the CDC saying 70 percent of US adults have now received at least one dose of a coronavirus vaccine. Recent data has shown some signs of slowing economic growth, but traders may see that as further proof the Federal Reserve will not begin scaling back stimulus anytime soon. The Federal Reserve has repeatedly pledged to maintain its asset purchases at current levels until substantial further progress has been made toward its maximum employment and price stability goals. Besides, the 10-year Treasury yield stabilized on Tuesday after falling back to near five-month lows on Monday. As yields rebounded from their decline midday back to the unchanged mark, stocks rose.


Crude oil futures ended lower on Tuesday, extending their previous session's losses, as concern over rising cases of the Delta coronavirus variant. Data from the Centers for Disease Control and Prevention has shown a jump in new coronavirus cases in the US in recent weeks, with the seven-day moving average of new cases reaching 72,790 last Friday, surpassing the peak seen last summer. The surge in new coronavirus cases has led to renewed lockdowns in some parts of the world, which have added to recent concerns about a slowdown in the pace of the US economic recovery. Crude oil futures for September fell 70 cents or 1 percent to settle $70.56 barrel on the New York Mercantile Exchange. October Brent crude dropped 48 cents or 0.66 percent to settle at $72.41 a barrel on London's Intercontinental Exchange.


Continuing previous session gains, Indian rupee ended significantly higher against dollar on Tuesday, on persistent selling of the American currency by exporters. Traders were energized as India's exports grew by 47.19 per cent to $35.17 billion in July on account of healthy growth in the outbound shipments of petroleum, engineering, and gems and jewellery. Imports during the month also rose by 59.38 per cent to $46.40 billion, leaving a trade deficit of $11.23 billion. Additional support also came as Finance Minister Nirmala Sitharaman said the government's net tax revenues grew 5 per cent in the fiscal year ended March 31, 2021. Also, healthy gains in domestic equity market also supported rupee. On the global front, sterling rose on Tuesday, helped by recent falls in COVID-19 infections in Britain and optimism around Britain's easing of lockdown restrictions. Finally, the rupee ended 74.28, stronger by 6 paise from its previous close of 74.34 on Monday.


The FIIs as per Tuesday's data were net seller in equity segment, white net buyer in debt segment. In equity segment, the gross buying was of Rs 7732.18 crore against gross selling of Rs 9220.02 crore, while in the debt segment, the gross purchase was of Rs 419.93 crore against gross selling of Rs 12.03 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.39 crore against gross selling of Rs 8.72 crore.


The US markets ended higher on Tuesday led by gains in the Oil & Gas, Healthcare and Basic Materials sectors. Asian markets are trading mostly in green on Wednesday led largely by strong US corporate earnings, although the mood remained cautious as the rapidly spreading Delta variant of the coronavirus clouds the global economic outlook. Indian markets ended at record closing highs on Tuesday, with the Nifty 50 index settling above 16,100, as a wave of bullishness driven by earnings and hopes of recovery hit investors. Today, benchmarks are likely to open in the green following gains in global markets. Investors' focus will remain on the ongoing earnings season, the RBI MPC meet that will kick off today and the macroeconomic data viz Markit Services and Composite PMI numbers for July to be out later in the day. Traders will take note of report that the Central Board of Direct Taxes (CBDT) has extended the due dates for electronic filing of various forms under the Income-tax Act, 1961 considering the difficulties reported by the taxpayers and other stakeholders in the electronic filing of certain Forms. However, traders may be concerned with report that the reproduction number of coronavirus has increased beyond one in eight states across the country with the health ministry sounding cautious that the second wave of the epidemic was still raging. There may be some cautiousness as the government informed Parliament that it expects the total debt as percentage of GDP to increase to 61.7 per cent (provisional) in 2021-22 from 60.5 per cent (provisional) in the previous fiscal. At the same time, public debt would rise to 54.2 per cent in the current financial year from 52 per cent in 2020-21. Besides, GST officers have detected tax evasion of Rs 7,421 crore in the April-June period of the current fiscal. Meanwhile, with the markets at record highs amid economic challenges because of the Covid pandemic, Union Finance Minister Nirmala Sitharaman said the government, the Reserve Bank of India, and the Securities and Exchange Board of India are regularly monitoring the behaviour of the financial markets. There will be some reaction in NBFCs stocks as rating agency Icra said the asset quality of non-banking finance companies will see elevated stress levels in the near term due to the second wave of the pandemic, but the stress will subside subsequently as collection efficiencies improve and restructuring picks up. Auto component industry stocks will be in focus as industry body ACMA (Auto Component Manufacturers Association) said India's auto component industry saw the cumulative revenue decline 3 per cent to Rs 340 lakh crore in the year that ended in March 2021. There will be some reaction in hotel industry stocks as Hotel Association of India (HAI) has sought the Union government's help to revive the hospitality industry, including by extending one-time restructuring of loans. Devyani International, Windlas Biotech, Exxaro Tiles, and Krsnaa Diagnostics' IPO will today open for subscription. Devayni International is looking to raise Rs 1,838 crore; Windlas Biotech will raise Rs 401 crore; Krsnaa Diagnostics will raise Rs 1,213 crore, and Exxaro Tiles will raise just Rs 161 crore.


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



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  • Tata Motors has increased prices of its passenger vehicles by 0.8 percent with effect from August 3, 2021.  
  • Coal India has registered a 30.7 percent growth in fuel supplies to the power sector at 166.3 million tonnes during the April-July period. 
  • SBI's subsidiary company -- SBI General Insurance has entered into partnership with Manipal Business Solutions, the promoter of SahiPay. 
  • Reliance Industries has invested Rs 1,00,000 in cash in 10,000 equity shares of Rs 10 each of Reliance New Solar Energy, a newly incorporated wholly owned subsidiary.
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