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NSE Intra-day chart (02 July 2021)
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Market Commentary 05 July 2021
Markets likely to get firm opening on Monday; Services PMI eyed


Snapping their four-session losing run, Indian equity benchmarks ended in green on Friday led by gains in ICICI Bank, Reliance Industries, SBI, Titan Company and HDFC. Markets made a cautious start, as India recorded 43,360 infections and 796 fatalities in the last 24 hours. In just over five weeks, from May 23 to July 1, the country reported 100,000 deaths from Covid even as the second wave waned. Sentiments remained in lackluster mood as the Financial Stability Report (FSR) released by the Reserve Bank of India (RBI) said that the gross non-performing assets (GNPAs) ratio of banks may increase to 9.8 percent by March 2022 from 7.48 percent in March 2021 under a baseline scenario. Besides, foreign institutional investors (FIIs) stood as net sellers in the capital market as they offloaded shares worth Rs 1,245.29 crore on Thursday, as per provisional exchange data. However, late hour buying helped benchmarks to end the session near intraday high levels as traders found some solace with credit rating agency, Moody's Investors Service assessed the overall economic effect of the second wave to be softer than that during the first wave of pandemic last year, although delivery of and access to vaccines will determine the durability of recovery. Moody's expects the current lockdowns to have less of an adverse impact on economic activity than the nationwide lockdown in April 2020 because the latest restrictions have been more targeted, localised and less stringent. Some support also came with the Union Finance Minister Nirmala Sitharaman's statement that a special session of the GST Council will be held soon to discuss all compensation-related issues. She also said that the flow of COVID-19 vaccination across the country will be well managed and all states will be taken care of. Finally, the BSE Sensex rose 166.07 points or 0.32% to 52,484.67, while the CNX Nifty was up by 42.20 points or 0.27% to 15,722.20.


The US markets settled sharply higher on Friday as traders reacted positively to the closely watched monthly jobs report. The advance lifted all three major averages to new record closing highs. The Labor Department released a report showing a continued reacceleration in the pace of US job growth in the month of June. The report showed non-farm payroll employment spiked by 850,000 jobs in June after surging by an upwardly revised 583,000 jobs in May. Street had expected employment to jump by about 700,000 jobs compared to the addition of 559,000 jobs originally reported for the previous month. Following the decrease in employment seen last December, the pace of job growth has bounced back to its highest level since last August. Meanwhile, the Labor Department said the unemployment rate unexpectedly inched up to 5.9 percent in June from 5.8 percent in May. The unemployment rate was expected to edge down to 5.7 percent. The stronger than expected job growth paints a positive picture of the gradually reopening economy but is not seen as likely to significantly alter the Federal Reserve's timeline for tightening monetary policy. A separate report from the Commerce Department showed the US trade deficit widened roughly in line with estimates in the month of May.


Crude oil futures ended marginally lower on Friday ahead of the outcome of the meeting of the Organization of the Petroleum Exporting Countries and its allies. OPEC+ was originally scheduled to discuss and announce its plans about increasing crude output on Thursday (July 1). However, the group announced yesterday that it will meet on Friday to discuss plans about easing production curbs. Meanwhile, a report from Baker Hughes showed US energy firms added oil and natural gas rigs for a third time in four weeks. The report said the oil and gas rig count in the US went up by 5 to 475 in the week ended July 2. This is the highest count since April 2020. Crude oil futures for August fell $0.07 or about 0.1 percent to settle at $75.16 barrel on the New York Mercantile Exchange. However, September Brent crude rose 33 cents to settle at $76.17 a barrel on London's Intercontinental Exchange.


Continuing prevision session drubbing, Indian rupee ended significantly weaker against dollar on Friday, on emergence of demand for the greenback from importers. Investors were worried as the Financial Stability Report (FSR) released by the Reserve Bank of India (RBI) said that the gross non-performing assets (GNPAs) ratio of banks may increase to 9.8 percent by March 2022 from 7.48 percent in March 2021 under a baseline scenario. Traders ignored report that Reserve Bank on India's scheme providing interest subsidy for post and pre-shipment export credit has been extended by three months till September, a move that will provide relief to exporters. On the global front, sterling hit fresh two-month lows against the dollar on Friday, pressured in the wake of dovish comments from the Bank of England's governor. Finally, the rupee ended 74.74, weaker by 19 paise from its previous close of 74.55 on Thursday.


The FIIs as per Friday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 5447.34 crore against gross selling of Rs 5561.75 crore, while in the debt segment, the gross purchase was of Rs 35.97 crore with gross sales of Rs 208.50 crore. Besides, in the hybrid segment, the gross buying was of Rs 22.97 crore against gross selling of Rs 31.45 crore.


The US markets ended higher on Friday with all three major indices at records after a solid jobs report that was not seen as accelerating a monetary policy shift. Asian markets are trading mixed on Monday ahead of key economic data releases in Australia and China. Indian markets broke their four-session losing run on Friday as emergence of buying in financial, pharma and IT stocks negated losses in metal counters. Today, the start of new week is likely to be firm tracking gains in global markets and ahead of the services PMI to be out later in the day. Sentiments will get a boost as India recorded the highest-ever exports of $95 billion during April-June, up 85 per cent year-on year (YoY) and 18 per cent higher than the first quarter of the fiscal year 2019-20. The merchandise exports grew 47 per cent YoY to $32.46 billion in June, driven by a robust demand of engineering goods, petroleum products, and gems and jewellery in the external markets. Besides, Commerce and Industry Minister Piyush Goyal said India has set a target of $400 billion merchandise exports for 2021-22. Some support will come as the Union government announced fresh guidelines to include wholesale and retail trades as micro, small and medium enterprises (MSMEs) in a move that is expected to benefit as many as 25 million traders battered by the Covid-19 pandemic. Additionally, in reversal of a two-month selling trend, foreign portfolio investors (FPIs) in June turned out to be net buyers by investing Rs 13,269 crore in Indian markets. However, there may be some cautiousness as India's total tally of Covid-19 cases surged to 30,584,872 on Monday with 40,387 new infections being reported in a day, while 29,692,986 have recovered, according to Worldometer. The death count increased to 402,758 with 743 new fatalities. Meanwhile, the Reserve Bank of India (RBI) has highlighted the likely issues around big tech's role in the financial services sector and said that concerns such as level playing field with banks and operational risks have intensified lately. There will be some buzz in infrastructure stocks as NHAI said toll collection in June 2021 increased to Rs 2,576.28 crore, 21 per cent higher than Rs 2,125.16 crore collected in May this year, with the easing of lockdown in most states and rise in the traffic movement on the highways. There will be some reaction in oil & gas industry stocks as Union Finance Minister Nirmala Sitharaman ruled out any cut in excise duty levied on petroleum products for now. She said that there is no such proposal at the present to reduce prices of petroleum. Auto stocks will be in focus with report that auto companies may soon be asked to manufacture passenger and commercial vehicles that run on multiple fuel configuration aimed at reducing the use of polluting fossil fuels and cutting down harmful emissions. Besides, shares of India Pesticides will make their debut on the stock exchanges today. The initial public offering of the agrochemical firm was subscribed 29 times last month with retail investors bidding for the issue 11.3 times.


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



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Nifty Top volumes





Previous close (Rs)

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Tata Motors





Adani Ports & Special Economic Zone











  • L&T has completed the transfer of its digital transformation business undertaking, incubated and conducted as L&T-NxT to Mindtree, a listed subsidiary company.
  • TCS has partnered with John Wiley & Sons to modernize its ecommerce platform with SAP Commerce, creating a unified, seamless customer experience. 
  • Maruti Suzuki India has extended free service and warranty timelines for its customers.  
  • Bharti Airtel has launched its latest innovation Airtel Black - India's first all-in-one solution for homes.
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