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NSE Intra-day chart (22 December 2020)
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Market Commentary 23 December 2020
Benchmarks to open in red on weak global cues


Indian equity benchmarks made smart recovery on Tuesday, after witnessing massacre in the previous session, led by gains in information technology heavyweights like HCL Technologies, Tech Mahindra and Infosys. Soon after making a positive start, key gauges entered into red terrain as traders turned pessimistic amid reports of new strains of coronavirus in the UK. Rising corona virus cases too dampened sentiments with increase in Covid-19 cases, India's caseload now stands at 10,075,422 and the country's death toll has mounted to 146,145. Cautiousness also crept in on report that Maharashtra government imposed a curfew from 11 pm to 6 am in all municipal corporations from December 22 till January 5, 2021. Markets took U-turn in second half of the trade to end near intraday highs, as traders opted to buy beaten down but fundamentally strong stocks. Traders took encouragement with CRISIL's report that corporate profits rose 15 per cent to touch an all-time high in the September quarter as margins widened on softer input costs and better utilistaion levels. Some support also came as economic think-tank NCAER, in its mid-year review of the Indian economy, has said that India's Gross Domestic Product (GDP) growth is likely to turn positive at 0.1 per cent in the October-December (Q3) quarter, after witnessing a contraction in the first half of the current financial year. It also forecast 2 per cent growth in the fourth quarter (January-March 2021). It noted that the overall contraction in the current fiscal is likely to be contained at 7.3 per cent. Adding to the optimism, Ministry of Finance has released the 8th weekly installment of Rs 6,000 crore to the states. Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. Finally, the BSE Sensex rose 452.73 points or 0.99% to 46,006.69, while the CNX Nifty was up by 137.90 points or 1.03% to 13,466.30.


The US markets ended mostly lower on Tuesday amid uncertainty about the near-term outlook for the markets following the recent run to record highs. Reports about a new coronavirus strain generated some negative sentiment, although news of the approval of a new stimulus bill helped prop up the markets. The $900 billion relief package includes federal assistance for the unemployed, small businesses and healthcare providers as well as $600 in direct payments to individuals. The relief package was attached to a $1.4 trillion government spending bill that funds the government through September 30th. The bill is expected to be signed by President Donald Trump in the coming days. On the economic data front, the Commerce Department released revised data showing the US economy grew by slightly more than previously estimated in the third quarter of 2020. The report showed the spike in gross domestic product in the third quarter was upwardly revised to 33.4 percent from the previously reported 33.1 percent. Street had expected the jump in GDP to be unrevised. The Commerce Department said the unexpected upward revision primarily reflected larger increases in consumer spending and non-residential fixed investment. Meanwhile, the National Association of Realtors released a separate report showing existing home sales pulled back in the month of November. NAR said existing home sales tumbled by 2.5 percent to an annual rate of 6.69 million in November after jumping by 4.4 percent to a revised rate of 6.86 million in October. Street had expected existing home sales to slump by 2.2 percent to a rate of 6.70 million from the 6.85 million originally reported for the previous month.


Crude oil settled lower on Tuesday, extending their previous session's losses, amid rising worries about the outlook for energy demand due to new restrictions on travel following a surge in coronavirus cases. Despite the rollout of a vaccine, worries about virus infections continue following the detection of a new variant of the coronavirus in the UK. More than 40 countries have banned UK arrivals amid fears over the coronavirus mutation that was first identified in Britain. Crude oil futures for February fell $0.95 or 2 percent to settle at $47.02 a barrel on the New York Mercantile Exchange. February Brent crude dropped $0.83 or 1.6 percent to settle at $50.08 a barrel on London's Intercontinental Exchange.


Tumbling for second straight session, Rupee ended weaker against dollar on Tuesday amid cautiousness on renewed fears of a highly infectious new strain of COVID-19. Traders took note of private report that rupee is probably end calendar year 2020 as the worst performing currency in Asia, even underperforming minor South Asian currencies such as the Pakistani rupee and Sri Lankan rupee. However, downfall remained capped as economic think-tank NCAER, in its mid-year review of the Indian economy, has said that India's Gross Domestic Product (GDP) growth is likely to turn positive at 0.1 per cent in the October-December (Q3) quarter, after witnessing a contraction in the first half of the current financial year. On the global front, euro and the pound were on the defensive against the dollar on Tuesday as a new coronavirus strain spread across Britain, closing key trade routes and creating a supply-chain nightmare while time was running out to strike a post Brexit trade deal. Finally, the rupee ended at 73.84, 5 paise weaker from its previous close of 73.79 on Monday.


The FIIs as per Tuesday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 6870.70 crore against gross selling of Rs 6847.83 crore, while in the debt segment, the gross purchase was of Rs 483.67 crore with gross sales of Rs 1305.01 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.42 crore against gross selling of Rs 17.69 crore.


The US markets ended mostly lower on Tuesday over concerns the new COVID variation, which has halted movement in and out of the UK and sent vaccine makers scrambling to ensure their drugs are effective against it, could further hamper a softening economic recovery. Asian markets are trading mixed on Wednesday as the investor focus swung between concerns about a new faster-spreading variant of the coronavirus and hopes that more US fiscal aid would propel an economic recovery. Indian markets witnessed a sharp recovery to end 1 percent higher on Tuesday led by robust buying in IT and pharma stocks. Today, the start of session is likely to be pessimistic tracking weakness in global peers. Rising coronavirus cases to dent the sentiments in markets. With 19,174 fresh Covid-19 cases, India's caseload now stands at 10,099,303. The country's death toll has mounted to 146,476. At least 20 passengers from the UK tested positive for Covid-19 on Tuesday as the government issued a stringent set of SOPs mandating RT-PCR tests at airports for each traveller from the country and isolation in a separate unit of an institutional facility for positive cases in view of the new coronavirus strain. However, investors may get some solace from a private report that India is likely to approve Oxford/AstraZeneca's coronavirus vaccine for emergency use by next week after its local manufacturer submitted additional data sought by authorities. Traders may be taking encouragement with PHD Chamber of Commerce and Industry's EBM Index showing that the continuous improvement in the key economic and business indicators signals that the worst is behind us and expectations of positive GDP growth at 0.1 per cent to 2 per cent in Q3 and 2 per cent to 4 per cent in Q4 FY 2020-21 are becoming strong with a higher growth trajectory in FY 2021-22 at 7.7 per cent. Some support may come with Commerce and Industry Minister Piyush Goyal's statement that India and Bangladesh should work with greater collaboration in the agriculture sector as it can be a game-changer for both the countries. Meanwhile, the government has again extended the suspension of fresh proceedings under the insolvency law by three more months amid the disruptions caused by the coronavirus pandemic. There will some buzz in agriculture sector stocks with report that paddy procurement has increased 22 per cent so far in the ongoing kharif marketing season to 422.01 lakh tonnes, valued at Rs 79,675 crore. NBFCs and HFCs stocks will be in focus with ICRA's report that after witnessing a sharp contraction in the current fiscal so far, the domestic securitisation volumes of retail pools originated by non-banking financial companies (NBFC) and housing finance companies (HFC) are likely to witness a healthy bounce back in FY2022.


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



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  • Coal India has allocated 25.78 MT of coal in the first eight months of this fiscal under spot e-auction scheme, registering a year-on-year increase of 59.4 per cent. 
  • Tata Motors is going to increase prices across its commercial vehicle range, effective January 01, 2021. 
  • Bajaj Finserv Group is offering customers a hassle-free shopping experience via its EMI Store.   
  • ICICI Bank has launched an online platform for foreign companies looking to establish or expand business in the country.   
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