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NSE Intra-day chart (02 February 2021)
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Market Commentary 03 February 2021
Markets likely to get positive start on firm global cues


Indian equity benchmarks extended their historic Budget-day rally into second day on Tuesday and ended nearly 2.5 percent higher, as investors continue to cheer Budget announcements amid positive global cues. Markets made a gap-up opening, as traders took encouragement with a private report stating that the increase in healthcare outlay in the latest annual budget will lead India towards a healthier country and the thrust on infrastructure will boost growth and generate jobs. Some support also came in as foreign institutional investors (FIIs) turned net buyers in Indian markets after a five-day hiatus. FIIs net bought shares worth Rs 1,494.23 crore while domestic institutional investors net sold shares worth Rs 90.46 crore. Key indices extended their gains in late afternoon session, after India Ratings said the Budget numbers are more credible and achievable than in the past many years, and the government may even exceed the revenue targets if the current tax buoyancy level is maintained. Traders were also optimistic, as the US-India Business Council said that the annual budget presented by Finance Minister Nirmala Sitharaman has several bold initiatives that set the tone for an accelerated post-pandemic economic recovery and new opportunities for India's social development. Traders also took a note of S&P Global Rating's statement that India's Budget for fiscal 2022 (ending March 31, 2022) represents a comprehensive effort by the Central government to shore up the country's nascent economic recovery. But the brawny spending programme also entails higher-than-expected general government deficits -- at more than 14 per cent of GDP this fiscal year and 11.6 per cent in fiscal 2022. Finally, the BSE Sensex rose 1197.11 points or 2.46% to 49,797.72, while the CNX Nifty was up by 366.65 points or 2.57% to 14,647.85.


The US markets ended higher on Tuesday, extending their previous session's gains, as stocks that recently benefited from the retail trading frenzy moved sharply higher. Video game retailer GameStop, which is seen as the poster child for the so-called retail investor revolt, plummeted by 60 percent after plunging by more than 30 percent on Monday.  The markets also benefited from a positive reaction to the latest earnings news, with Exxon Mobil moving notably higher after reporting better than expected fourth quarter earnings. Delivery giant UPS also showed a strong move to the upside after reporting fourth quarter results that exceeded street estimate on both the top and bottom lines. Traders also remained optimistic about more fiscal stimulus after President Joe Biden met with a group of ten Republican Senators who have offered a counterproposal to his $1.9 trillion relief plan. Senator Susan Collins, R-Maine, called the meeting very productive and said the two sides plan to continue negotiations. A White House statement also described the meeting as productive but noted that Democrats could still use the reconciliation process to pass a relief bill without Republican support.


Magnifying their previous session's gains, crude oil futures ended higher on Tuesday as the Organization of the Petroleum Exporting Countries (OPEC) and their allies' move to cut production helped ease worries about any excess supply in the market. Also, with the coronavirus vaccination drive gathering momentum in several countries, concerns about the outlook for energy demand have eased a bit. Meanwhile, the number of new coronavirus cases globally has fallen for the third week in a row, the World Health Organization reported on Monday, but urged countries not to let up efforts to defeat the disease. Crude oil futures for March rose $1.21 or 2.3 percent to settle at $54.76 barrel on the New York Mercantile Exchange. April Brent crude gained $1.18 or 2.1 percent to settle at $57.51 a barrel on London's Intercontinental Exchange.


Erasing prevision session loss, Indian rupee ended higher against dollar on Tuesday due to fresh selling of the American currency by banks and exporters. Sentiments were upbeat as India's exports grew 5.37 per cent year-on-year to $27.24 billion in January 2021, mainly driven by healthy growth in pharma and engineering sectors. Traders also got support as foreign institutional investors (FIIs) turned net buyers in Indian markets after a five-day hiatus. FIIs net bought shares worth Rs 1,494.23 crore. Besides, healthy gains in domestic equity markets also supported rupee. On the global front, pound gained against both the dollar and the euro on Tuesday on report that faster pace of vaccinations in Britain and the scope for a faster economic recovery would boost the currency this year. Finally, the rupee ended at 72.96, 6 paise stronger from its previous close of 73.02 on Monday.


The FIIs as per Tuesday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 11687.59 crore against gross selling of Rs 9839.03 crore, while in the debt segment, the gross purchase was of Rs 288.91 crore against gross selling of Rs 155.40 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.61 crore against gross selling of Rs 16.58 crore.


The US markets ended higher on Tuesday on renewed hopes for US President Joe Biden' proposed $1.9 trillion Covid-19 aid bill as the Senate voted to start a process that would allow Democrats to pass Biden's package without Republican support. Asian markets are trading mostly in green on Wednesday tracking overnight gains on Wall Street. Indian markets notched record closing highs on Tuesday as the buying frenzy triggered by the Budget continued for the second day. Today, the start of session is likely to be positive following firm global cues. Though, higher crude oil prices may weight on the markets. Investors will be eyeing the services PMI data to be out later in the day. Traders will be taking encouragement with NITI Aayog Vice-Chairman Rajiv Kumar's statement that the reform measures announced in the budget 2021-22 are aimed at taking India out of the COVID-19-induced downturn and making the country a better destination for private investment, both for domestic and foreign investors. Some support will also come with the commerce ministry's data showing that the country's exports grew 5.37 percent Y-o-Y to $27.24 billion in January 2021, mainly driven by healthy growth in pharma and engineering sectors. The trade deficit during the month narrowed to $14.75 billion from $15.3 billion in January 2020. It was $15.44 billion in December 2020. Besides, Foreign Institutional Investors (FII) were net buyers of domestic equities on Tuesday, pumping in a massive Rs 6,181 crore. Traders may take note of report that India has reported a net reduction of 4,882 to take its count of active coronavirus cases to 163,353, the lowest since June 19 and 83.95 per cent lower than the September 18 peak of 1,017,754. India's share of global active coronavirus cases has declined to 0.63 per cent (one in 159). There will be some reaction in power sector stocks with the All India Power Engineers Federation's (AIPEF) statement that intensifying stir against the Centre's privatisation policy, 1.5 million power sector employees of the country would resort to work boycott on February 3. Some banking stocks will be in focus as the finance ministry expects the remaining three public sector banks (PSBs) to be out of the RBI's prompt corrective action (PCA) framework in two months as their financial health has improved. There will be some reaction in sugar industry stocks with industry body ISMA's statement that sugar mills have manufactured 25.37 per cent more sugar at 17.68 million tonnes in the first four months of the current marketing season ending September this year. Also, Brookfield's Real Estate Investment Trust (REIT) public issue will hit the capital market on Wednesday at a price band of Rs 274 to Rs 275 to raise up to Rs 3,800 crore. The public issue will close on February 5. Meanwhile, the shares of Home First Finance will make their market debut today. The company's Rs 1,154-crore initial public offering, which ran from January 21 to 25, was subscribed 27 times.


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  • Coal India's coal production declined by 4.1 per cent to 60.5 MT January 2021. 
  • Adani Ports and SEZ has handled cargo volume of 26.02 MMT in January 2021 a growth of 31% on Y-o-Y basis. 
  • Tata Motors has delivered Tigor EVs to Goa's Department of New and Renewable Energy. 
  • HDFC has reported 34.97% rise in its consolidated net profit attributable to owners at Rs 5176.76 crore for Q3FY21 as compared to net profit at Rs 3835.38 crore for Q3FY20.
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