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NSE Intra-day chart (06 August 2021)
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Market Commentary 09 August 2021
Benchmarks to open tad higher amid gains in global peers


Indian equity benchmarks snapped their three-day winning streak and ended lower on Friday tracking losses in index heavyweights Reliance Industries, Ultratech Cement and SBI amid weak global cues. Markets made slightly positive start, as traders took some support with industry chamber PHDCCI's statement that the economy is recovering at a fast pace from the recent lows of April and May on the back of declining new coronavirus cases, continued unlocking in various parts of the country and calibrated economic reforms announced by the government. However, the domestic markets soon fell into the red after the Reserve Bank of India (RBI) kept repo rate unchanged for seventh time straight and continued with an accommodative stance, citing the need to support ongoing growth recovery amid continued uncertainty and global financial market volatility. The central kept the repo rate unchanged at 4% and the reverse repo rate, the borrowing rate, unchanged at 3.35%. Markets continued their sluggish trade in late afternoon session, as traders remain worried with Nobel laureate economist Abhijit Vinayak Banerjee apprehended that the impending third wave of the COVID-19 pandemic might adversely impact the GDP, and its growth rate might go down to 7 percent, even below the IMF's recent projection of 9.5 percent. Adding more pessimism, foreign institutional investors (FIIs) stood as net sellers in the capital market as they offloaded shares worth Rs 719.88 crore on Thursday, as per provisional exchange data. However, losses remain capped as some optimism remained among traders with Revenue Secretary Tarun Bajaj's statement that Retro tax withdrawal bill  will give confidence to the investor community regarding India's stable tax regime. Finance Minister Nirmala Sitharaman introduced The Taxation Laws (Amendment) Bill, 2021 in the Lok Sabha that seeks to withdraw tax demands made using a 2012 retrospective legislation to tax the indirect transfer of Indian assets. Besides, RBI retained the real GDP growth projection at 9.5 per cent for 2021-22 as domestic economic activity has started normalising with the ebbing of the second wave of the virus and the phased reopening of the economy. In the June monetary policy, the RBI had lowered the growth projection for 2021-22 to 9.5 per cent from 10.5 per cent estimated earlier. Finally, the BSE Sensex fell 215.12 points or 0.39% to 54,277.72, while the CNX Nifty was down by 56.40 points or 0.35% to 16,238.20. 


The US markets ended mostly higher on Friday as better than expected jobs data added to economic optimism but also raised concerns about the outlook for monetary policy. Nasdaq pulled back of Yesterday's record closing high, the Dow and S&P 500 reached new record closing highs. The Labor Department released a report showing non-farm payroll employment spiked by 943,000 jobs in July after surging by an upwardly revised 938,000 jobs in June. Street had expected employment to jump by 870,000 jobs compared to the addition of 850,000 jobs originally reported for the previous month. The stronger than expected job growth was partly due to sharp increases in employment in leisure and hospitality and local government education, which shot up by 380,000 jobs and 221,000 jobs, respectively. Reflecting the strong job growth, the unemployment rate slid to 5.4 percent in July from 5.9 percent in June, falling to its lowest level since March of 2020. Street had expected the unemployment rate to dip to 5.7 percent. Meanwhile, banking stocks moved sharply higher in morning trading, with the KBW Bank Index surging up by 2.6 percent to its best closing level in almost two months. Significant strength was also visible among oil service stocks, as reflected by the 2.4 percent jump by the Philadelphia Oil Service Index. The strength in the oil service sector came despite a decrease by the price of crude oil. Brokerage stocks also showed a considerable move to the upside, driving the NYSE Arca Broker/Dealer Index up by 1.7 percent On the other hand, gold stocks showed substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 3.8 percent. The sell-off by gold stocks comes amid a nosedive by the price of the precious metal, with gold for December delivery plunging $45.80 to $1,763.10 an ounce.


Crude oil futures ended sharply lower on Friday with the commodity staging a turnaround from earlier gains after a better-than-expected report on U.S. employment helped to deliver a fillip to the U.S. dollar, weighing on assets priced in the currency. Headwind in the crude oil prices came amid concerns about the outlook for global demand amid a surge in coronavirus infections overshadowed upbeat U.S. jobs data. In the United States, daily new COVID-19 cases have climbed to a six-month high, with more than 100,000 infections reported nationwide. Meanwhile, the Labor Department released a report showing non-farm payroll employment spiked by 943,000 jobs in July after surging by an upwardly revised 938,000 jobs in June. Crude oil futures for September lost 81 cents or 1.2 percent to settle $68.28 barrel on the New York Mercantile Exchange. October Brent crude fell 59 cents or 0.8 percent to settle at $70.70 a barrel on London's Intercontinental Exchange.


Indian rupee ended marginally higher against dollar on Friday, on persistent selling of the American currency by exporters. Traders remained positive with industry chamber PHDCCI's statement that the economy is recovering at a fast pace from the recent lows of April and May on the back of declining new coronavirus cases, continued unlocking in various parts of the country and calibrated economic reforms announced by the government. Meanwhile, the RBI kept the monetary policy rate unchanged at 4 per cent and continued with the accommodative policy stance. The central bank pegged real GDP growth forecast for FY22 at 9.5 per cent and at 17.2 per cent for FY23. On the global front, dollar crept higher on Friday, lifted by a rise in U.S. inflation-adjusted bond yields to one-week highs and expectations of a strong set of employment data that could make the case for faster U.S. policy tightening. Finally, the rupee ended 74.15, stronger by 2 paise from its previous close of 74.17 on Thursday.


The FIIs as per Friday's data were net seller in equity segment, while net buyer in debt segment. In equity segment, the gross buying was of Rs 8763.58 crore against gross selling of Rs 9306.55 crore, while in the debt segment, the gross purchase was of Rs 551.84 crore with gross sales of Rs 491.12 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.39 crore against gross selling of Rs 11.49 crore.


The US markets ended mostly higher on Friday amid a positive jobs report. Asian markets are trading mostly in green on Monday amid sharp losses in gold and oil prices, while the dollar held near four-month highs after an upbeat US jobs report lifted bond yields. Indian markets ended lower Friday after the Reserve Bank of India (RBI) kept the policy rates unchanged. Today, the markets are likely to make slightly positive start tracking gains in global markets. This week, the specifics on important economic indicators like Industrial Production for June and CPI inflation for July will keep markets on their feet. Both the numbers are slated to be out on August 12. Traders will be taking encouragement as referring to Prime Minister Narendra Modi's target of $400 billion in exports this year, the Confederation of Indian Industry (CII) called it attainable, given the current global situation of post-pandemic economic recovery and rising competitiveness of Indian goods. Some support will come as Niti Aayog CEO Amitabh Kant said India needs low-cost capital to help domestic entrepreneurs execute global scale projects in areas like green hydrogen, solar energy, electric vehicles and battery manufacturing, and added that there is a need to build a sustainable country. Also, easing more Covid-19 restrictions, Maharashtra Chief Minister Uddhav Thackeray said Mumbai's local trains will be open from August 15 to fully vaccinated people 14 days after their second jab. Besides, seeking incentives from the government, the Services Export Promotion Council (SEPC) said services exports have been recording healthy growth rate consistently and are expected to grow by 28 per cent in 2021-22 to take the exports to nearly $ 266 billion. Traders may take note of Governor Shaktikanta Das' statement that the Reserve Bank of India has to manage many conflicting objectives while determining monetary policy, and hence its action has to be nuanced and cannot be unidirectional. Power stocks will be in focus as according to power ministry data India's power consumption grew 9.3 per cent in the first week of August to 28.08 billion units (BU) due to improved economic activities after easing of lockdown curbs by states. There will be some buzz in the oil & gas sector as the Ministry of Petroleum and Natural Gas launched the sixth round of bids under the Open Acreage Licensing Programme (OALP). As per the report, 21 blocks, with an area of approximately 35,346 sq km are on offer to investors. There will be some reaction in real estate industry stocks as several industry experts said that the Reserve Bank of India's (RBI's) decision to keep key interest rates on hold augurs well for the real estate sector as it will further improve consumer sentiment. Meanwhile, Nuvoco Vistas Corporation, part of the Nirma Group, and online auto classified platform CarTrade Tech will launch their initial share-sales on Monday, August 9 while that of Aptus Value Housing Finance and Chemplast Sanmar will be open for public subscription on Tuesday, August 10. Markets will also enter in the last leg of earnings season, with some 1900 companies slated to post their numbers.


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  • Tata Motors has signed a MoU with Common Service Centre Scheme e-Governance Services India in order to expand sales of its CV in the rural areas. 
  • ITC's hospitality arm -- ITC Hotels has entered into partnership with the Confederation of Indian Industry. 
  • Britannia Industries has re-launched its Milk Bikis Classic in Tamil Nadu, following an overwhelming demand from consumers. 
  • Hindalco Industries has received approval from board of directors for downstream Flat Rolled Project at existing facilities at Hirakud and Aditya.  
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