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NSE Intra-day chart (23 December 2020)
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Market Commentary 24 December 2020
Markets likely to get positive start following global peers


Indian equity benchmarks ended higher for the second straight day on Wednesday, tracking gains in Hindustan Unilever, Infosys and Mahindra & Mahindra amid a positive trend in global markets. Key gauges made cautious start, amid concerns about a new faster-spreading variant of the coronavirus. But, the benchmarks soon gained traction and traded in fine fettle, as investors took 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 also took 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. Domestic indices extended gains in late afternoon deals, taking support from rating agency ICRA's report that the domestic securitization 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, after witnessing a sharp contraction in the current fiscal so far. Some respite also came with Financial Services Secretary Debasish Panda's statement that the government plans to set up a Development Finance Institution (DFI) in the next three to four months, with a view to mobilize Rs 111 lakh crore required for funding of the ambitious national infrastructure pipeline. Meanwhile, Industry body CII said it has demanded higher allocation of fund for food processing schemes and tax incentives for exports of agriculture and food items. In a pre-Budget meeting with senior finance ministry officials, CII highlighted the need to find ways for tapping export markets for wheat. Finally, the BSE Sensex rose 437.49 points or 0.95% to 46,444.18, while the CNX Nifty was up by 134.80 points or 1.00% to 13,601.10.


The US markets ended mostly higher on Wednesday on positive reaction a slew of US economic data, including a report from the Labor Department showing a significant pullback in first-time claims for unemployment benefits in the week ended December 19th. The report said initial jobless claims slid to 803,000, a decrease of 89,000 from the previous week's revised level of 892,000. Street had expected jobless claims to come in unchanged compared to the 885,000 originally reported for the previous week. The unexpected pullback came after jobless claims reached their highest level since early September in the previous week. The Commerce Department also released a report showing new orders for US manufactured durable goods increased by more than expected in the month of November. However, buying interest was somewhat subdued, as separate reports from the Commerce Department showed steep drops in personal income and new home sales. Uncertainty about a coronavirus relief package approved by Congress also led to cautious trading after President Donald Trump slammed the bill as a disgrace. Trump called on Congress to amend the bill to increase the direct payments to individuals to $2,000 from $600 and get rid of the wasteful and unnecessary items.


Crude oil futures ended higher on Wednesday, after data showed a drop in US crude stockpiles. Data from Energy Information Administration (EIA) showed crude inventories in the US fell by 562,000 barrels in the week ended December 18. The data also said gasoline stockpiles were down by 1.1 million barrels last week, and distillate stocks dropped by 2.3 million barrels. Oil also found support from the closure of the Qua Iboe crude oil export terminal last week following a fire at the facility. Meanwhile, France's decision to reopen its borders with the UK to travelers and truck drivers who test negative for Covid-19, a weaker dollar and optimism about a post-Brexit trade deal between the UK and European Union helped as well. Crude oil futures for February rose $1.10 or 2.3 percent to settle at $48.12 a barrel on the New York Mercantile Exchange. February Brent crude gained $1.12 or 2.25 percent to settle at $51.20 a barrel on London's Intercontinental Exchange.  


Indian rupee ended higher against dollar on Wednesday, on persistent selling of the American currency by exporters. Traders were energized with PHD Chamber of Commerce and Industry's EBM Index (Economic and Business Momentum Index) stating 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. The rupee also derived its strength from strong gains in the local equity markets. On the global front, pound firmed on Wednesday after three days of falls as France lifted a partial border blockade aimed at stopping the spread of a fast-spreading new COVID-19 strain, and hopes grew of a post-Brexit trade deal despite discouraging comments from both sides. Finally, the rupee ended at 73.76, 8 paise stronger from its previous close of 73.84 on Tuesday.


The FIIs as per Wednesday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 8678.05 crore against gross selling of Rs 5456.10 crore, while in the debt segment, the gross purchase was of Rs 755.06 crore with gross sales of Rs 1184.94 crore. Besides, in the hybrid segment, the gross buying was of Rs 2455.62 crore against gross selling of Rs 20.63 crore.


The US markets closed mostly higher on Wednesday as an expected stimulus deal and falling jobless claims prompted investors to put their money into sectors most likely to benefit from the economy re-opening when it recovers from the global health crisis. Asian markets are trading mostly in green on Thursday ahead of the Christmas break, as global investors cheered a potential Brexit deal and economic recovery prospects, largely ignoring US President Donald Trump's threat to veto a long-awaited COVID aid package. Indian markets ended higher on Wednesday after a rally in IT stocks overshadowed weak global investors sentiment stemming from the rapid spread of a new strain of the coronavirus in the UK. Today, the start of session is likely to be positive tracking gains in global peers. Traders will be taking encouragement with Union Minister of State for Finance and Corporate Affairs Anurag Thakur's statement that India will have a strong economic revival thanks to its well-planned easing of lockdown. He also defended the contentious farm sector reforms, saying the Narendra Modi government had the courage to do what others could not. Traders may take note of report that Covaxin, a COVID-19 vaccine being developed by Bharat Biotech, showed long-term antibody and T- cell (immune) memory responses three months after the shot in phase 1 volunteers and tolerable safety outcomes in Phase 2 study, the city-based company has said, suggesting the antibodies may persist for six to 12 months. Meanwhile, the Union Cabinet has approved changes to the guidelines for providing Direct to Home (DTH) services to bring it in line with the existing policy that allows 100 per cent FDI in the DTH broadcasting services sector. Banking stocks will be in focus as the Reserve Bank of India (RBI) governor Shaktikanta Das asked banks to take proactive measures to strengthen their resilience and lending capacity by raising capital. There will be some reaction in steel sector stocks with report that recovering economy, sprouting demand and improving prices raise hopes for the country's battered steel sector as it steps into the New Year after pandemic-induced disruptions turned 2020 into a disaster for the industry. Besides, Mrs Bectors Food Specialities shares will debut on the bourses today. The 541-crore public issue is the most subscribe IPO of 2020 so far with investors bidding for the issue 197.38 times where Non-Institutional Investors subscribed their portion a massive 620.85 times.


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  • Wipro has signed significant strategic digital and IT partnership deal with METRO AG, the leading global wholesale company that is redefining the food service distribution industry. 
  • Infosys has signed a long-term strategic partnership with Daimler AG for a technology-driven IT infrastructure transformation.  
  • L&T's construction arm -- L&T construction has been awarded (Large) contracts for its Water & Effluent Treatment Business.           
  • Tata Motors has introduced the Ultra T.7 - the most advanced LCV, designed specifically for urban transportation, with its all-new sleek Ultra cabin.   
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