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NSE Intra-day chart (28 July 2021)
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Market Commentary 29 July 2021
Markets likely to make positive start of F&O expiry session


Indian equity benchmarks erased almost all their losses to end marginally in the red on Wednesday as the regulatory crackdowns in China continued to impact investor sentiment. Markets opened weak and saw panic selling, as the International Monetary Fund (IMF) has cut India's gross domestic product (GDP) growth forecast to 9.5 percent for the fiscal year to March 31, 2022 as the onset of a severe second COVID-19 wave cut into recovery momentum. This forecast for 2021-22 is lower than the 12.5 per cent growth in GDP that IMF had projected in April before the second wave took a grip. Some concern also came after department-related Parliamentary Standing Committee observes that the stimulus package announced by the government for the economic revival from the pandemic hit economy has been found to be inadequate as the measures adopted were more of loan offering and long-term measures instead of improving the cash flow to generate demand as immediate relief. Traders also took a note of Finance Minister Nirmala Sitharaman informed Parliament that the number of wilful defaulters has increased from 2,208 to 2,494 at the end of March 31, 2021. As per RBI data on global operations, during the last three financial years, public sector banks (PSBs) have effected recovery of Rs 3,12,987 crore in non-performing assets (NPAs) and written-off loans. Markets however recouped most of its losses in late afternoon trade, as traders found some solace with Minister of State for Finance Pankaj Chaudhary has said increased tax collection in the first quarter this fiscal (Q1FY22) shows that the economy is on the recovery path. Net direct tax collection in the April-June quarter of the current fiscal is over Rs 2.46 lakh crore, as against more than Rs 1.17 lakh crore during the same period of the previous fiscal. Some support also came as Union Minister of State for Finance Bhagwat Kisanrao Karad said that the government has taken a number of steps to facilitate digital banking, doorstep banking services and digital lending platforms. Finally, the BSE Sensex fell 135.05 points or 0.26% to 52,443.71, while the CNX Nifty was down by 37.05 points or 0.24% to 15,709.40. 


The US markets ended mostly lower on Wednesday after a somewhat volatile session as investors reacted to a slew of corporate earnings updates, and the Federal Reserve's monetary policy statement. The Federal Open Market Committee, which concluded its two-day monetary policy meeting Wednesday, left the target range for its federal funds rate unchanged at 0 to 0.25 percent as expected, and said it will continue with its $120 billion-a-month bond-buying program. The bank, which said the economy is strengthening despite concerns over the spread of the coronavirus, added that risks to the economic outlook remain.  It noted the sectors most adversely affected by the pandemic have shown improvement but have not fully recovered. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to US households and businesses. Powell said there was more ground to make up in the labor market to meet substantial further progress threshold to taper bond purchases. Besides, shares of Alphabet Inc. climbed more than 3 percent after the company reported a sharp jump in earnings in the second quarter thanks to a near 70 percent increase in advertising revenue. Facebook, Inc gained 1.5 percent after reporting a profit of $10.39 billion or $3.61 per share for the second quarter, compared with $5.18 billion or $1.80 per share in the year-ago quarter. Boeing Company shares climbed more than 4 percent on strong results. The company reported net earnings of $587 million or $1.00 per share compared to a loss of $2.38 billion or $4.20 per share in the prior year.


Crude oil futures ended higher on Wednesday lifted by data showing a larger-than-expected drop in US crude inventories last week. Data released by Energy Information Administration (EIA) showed crude inventories in the US fell by 4.089 million barrels last week (July 23), over a million barrels up from an expected drop of about 2.9 million barrels. A report released by the American Petroleum Institute (API) on Tuesday showed US crude stocks fell by 4.7 million barrels for the week ended July 23, compared with street expectations for a 2.9 million fall in crude stocks, following a surprise rise in crude inventories the previous week. Crude oil futures for September rose $0.74 or 1 percent to settle $72.39 barrel on the New York Mercantile Exchange. September Brent crude gained $0.34 or 0.5 percent to settle at $73.86 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 took some solace with Minister of State for Finance Pankaj Chaudhary's statement that increased tax collection in the first quarter this fiscal shows that the economy is on the recovery path. Traders overlooked IMF's report in which it has sharply scaled down India's economic growth projection by 300 basis points to 9.5 per cent for the current financial year from 12.5 per cent estimated earlier in April. IMF said the downward revision is owing to lack of access to vaccines and possibility of renewed waves of coronavirus. On the global front, dollar made marginal gains on Wednesday with investors holding off on placing major bets ahead of the outcome of a U.S. Federal Reserve meeting. Finally, the rupee ended 74.38, stronger by 9 paise from its previous close of 74.47 on Tuesday.


The FIIs as per Wednesday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 8608.55 crore against gross selling of Rs 9166.73 crore, while in the debt segment, the gross purchase was of Rs 136.45 crore against gross selling of Rs 394.06 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.39 crore against gross selling of Rs 13.95 crore.


The US markets ended mostly lower on Wednesday in listless trade after the Federal Reserve gave no clue about when it might start reducing its purchases of government bonds, even as it said the economic recovery is on track. Asian markets are trading in green on Thursday after US Federal Reserve left the benchmark interest rates near zero. Indian markets closed lower amid weak global cues Wednesday even though they recovered half of their intraday losses in late afternoon deals. Today, the start of the F&O series expiry session is likely to be mildly positive tailing the gains in other Asian markets. Some support will come as the Reserve Bank of India (RBI) allowed payment system providers, prepaid card issuers, card networks and white label ATM operators access to its Centralised Payment Systems (CPS), such as real time gross settlement (RTGS) and National Electronic Fund Transfer (NEFT) systems in the first phase of its plan bring non-banks in the same platform. However, there may be some cautiousness with a private report that the Indian economy is expected to face some pressure in the current financial year due to the second wave of the pandemic, coupled with weaker consumer sentiment, but a large capex by the government can be a saving grace for the economy. Traders may take note of report that continuing efforts to foster ease of doing business as well as encourage startups ecosystem, the government has approved amendments to the Limited Liability Partnership (LLP) Act, including decriminalising 12 offences under the law. There will be some reaction in MSME stocks with a private report stating that non-performing assets in the micro, small and medium enterprises grew in the March quarter to 12.6 per cent against 12 per cent at the end of the preceding December quarter. The Rs 500-crore Tatva Chintan Pharma Chem IPO shares are scheduled to make their stock market debut on Thursday. The public issue was sold during July 16-20, and received the second-highest subscription of 185.23 times among IPOs in 2021. There will be lots of earnings reaction based on the performance of the companies.


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  • Larsen & Toubro's board has approved the amalgamation of the company's wholly-owned arm L&T Hydrocarbon Engineering with the parent firm. 
  • Dr Reddy's Laboratories is anticipating the locally manufactured Russia's COVID-19 vaccine Sputnik V to be available from September-October period. 
  • Tata Motors is looking to increase the prices of its entire range of passenger vehicles from next week as it aims to offset the steep rise in procurement cost of essential materials like steel and precious metals. 
  • HDFC Bank has launched an overdraft facility for small retailers in partnership with CSC SPV.
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