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NSE Intra-day chart (19 October 2021)
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Market Commentary 20 October 2021
Benchmarks likely to get flat-to-positive start on Wednesday


Indian equity benchmarks surrendered all of their intra-day gains to end marginally lower amid bouts of volatility on Tuesday. Broader markets closed deep in the red. Domestic markets started the day's trade at fresh all-time highs, as traders got encouragement with Union Minister Shobha Karandlaje's statement that the Centre has infused Rs 1,31,000 crore to boost agriculture and allied sectors with special emphasis on becoming an export-oriented economy as India has tremendous potential to satiate global demand. Additional optimism also came after preliminary data of the commerce ministry showed that the country's exports rose by 40.5 per cent to $15.13 billion during October 1-14 on account of healthy performance by key sectors such as petroleum products, engineering and chemicals. Sentiments remained positive with Crisil Ratings' report stating that the private industrial capital expenditure (capex) appears to be getting into a whole new cycle after the COVID-19 pandemic hiccup, driven by conducive government support through policy measures such as the Production-Linked Incentive (PLI) scheme and reduced tax rates and accommodative monetary policies and lower interest rates. However, markets turned red with minutes left before the closing bell, even as the Reserve Bank of India in its latest monthly bulletin October 2021 stating that amidst an accentuation of global risks, the Indian economy is picking up steam, although the recovery is uneven and trudging through soft patches. The step up in vaccination, slump in new cases/mortality rates and normalising mobility has rebuilt confidence. Market participants also failed to take support from a private report stating that Indian startups received a record funding of $10.9 billion across 347 deals in the third quarter of 2021. This is twice the amount of funding received in Q3 of the calendar year 2020 and an approximate increase of 41 percent compared to the second quarter of 2021. Meanwhile, observing that a continued coordinated policy response to fight COVID-19 including through vaccines is critical to overcome the ongoing health crisis, a top IMF official has said that addressing the long-standing reform priorities and improving education outcomes will be key to help minimise adverse medium-term impacts from the pandemic and further boost long-term growth in India. Finally, the BSE Sensex fell 49.54 points or 0.08% to 61,716.05 and the CNX Nifty was down by 58.30 points or 0.32% to 18,418.75.


The US markets ended higher on Tuesday as major companies continued to report strong third-quarter earnings, easing concerns that persistent Covid cases. Upbeat earnings reports from Travelers Companies Inc., Johnson & Johnson, Procter & Gamble and Netflix lifted sentiment. So far, 82% of S&P 500 companies that have reported earnings beat expectations, according to private report. It further stated taking into account those reports and estimates for those to come, third-quarter profit growth will come in at 30%. Meanwhile, energy stocks had a fairly good outing as falling temperatures in China pushed oil prices higher. Technology stocks moved higher, extending recent gains. Pharmaceuticals and utilities stocks advanced as well. On the economic data front, a report released by the Commerce Department showed an unexpected decrease in new US residential construction in the month of September. The report said housing starts fell by 1.6 percent to an annual rate of 1.555 million in September from a revised rate of 1.580 million in August. Street had expected housing starts to inch up to a rate of 1.620 million from the 1.615 million originally reported for the previous month. The report also showed building permits plunged by 7.7 percent to an annual rate of 1.589 million from a revised rate of 1.721 million in August. Building permits, an indicator of future housing demand, were expected to drop to a rate of 1.680 million from the 1.728 million originally reported for the previous month.


Crude oil futures ended higher on Tuesday on rising demand for fuel oil and diesel due to severe energy crisis in China and several parts across Europe. The Organization of the Petroleum Exporting Countries (OPEC) and allies' decision to stick to their plan of increasing output only gradually, and reports that a few oil producers are unlikely to meet current output targets contributed as well to oil's uptick. Besides, falling temperatures in the northern hemisphere has resulted in increased demand for oil, coal and natural gas, pushing up prices of these products. Meanwhile, traders were looking ahead to weekly oil report from US Energy Information Administration (EIA). The EIA is scheduled to release its inventory data Wednesday. Benchmark Crude oil futures for November delivery rose $0.52 or about 0.6 percent to settle at $82.96 barrel on the New York Mercantile Exchange. Brent crude for December delivery surged $0.65 or 0.77 percent to settle at $84.98 a barrel on London's Intercontinental Exchange.


Indian Money market remained closed on Tuesday on account of Id-e-Milad.


The FIIs as per Monday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 10654.50 crore against gross selling of Rs 9175.84 crore, while in the debt segment, the gross purchase was of Rs. 711.85 crore with gross sales of Rs 1079.20 crore. Besides, in the hybrid segment, the gross buying was of Rs 29.59 crore against gross selling of Rs 15.59 crore.


The US markets ended higher on Tuesday with the biggest boosts from the technology and healthcare sectors as investors appeared to bet on solid quarterly reports even as some worried that it was too early to celebrate. Asian markets are trading mostly in green on Wednesday following overnight gains on Wall Street. Indian markets snapped their longest winning streak in nearly 10 months on Tuesday and ended lower for the first time in eight sessions due to profit booking on the back of in-line September quarter results. Today, the start of session is likely to be flat-to-positive amid strong global cues and the ongoing earnings season. Traders will be taking encouragement as Services Export Promotion Council (SEPC) said the country's services exports are expected to reach over $240 billion during 2021-22 on account of healthy performance by segments such as professional and management consulting services, audio visual, freight transport services, and telecommunications. Some support will come as pointing out that India is the only G20 nation well on track to achieve the goals mentioned under the Paris Agreement, Niti Aayog CEO Amitabh Kant said India's efforts in mainstreaming sustainability and reducing carbon footprint should inspire countries across the world. Traders may take note of Minister of State for Electronics and IT Rajeev Chandrasekhar's statement that the government is looking at rolling out a five-year strategic perspective plan to make India a significant tech player. Meanwhile, GST Council is likely to consider one single tax rate for online gaming, racecourses, casinos and that could be as high as 28 percent. However, there may be some cautiousness with a private report that current account leading to higher imports and a rise in current account deficit, which is likely to print at 1.3 per cent of the GDP or $40 billion, up from 0.9 per cent surplus last fiscal. Additionally, the International Monetary Fund downgraded its 2021 economic growth forecast for Asia after the highly infectious Covid-19 delta variant caused a spike in cases in parts of the region. Banking stocks will be in focus as rating agency Crisil in a research note said that the gross non-performing assets (NPAs) of Indian banks may rise to 8-9 per cent by the end of this fiscal year (FY22), 50-150 basis points higher than FY21 levels, but much below the FY18 levels when NPAs reached a peak of 11.2 per cent. There will be some reaction in tobacco related stocks as the government constituted an expert panel on future taxation policy for tobacco. It will develop a comprehensive tax policy on the products from the point of view of public health. There will be lots of important earnings announcements too, to keep the markets in action.


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  • Dr. Reddy's Laboratories has received final approval for its ANDA for Lenalidomide Capsules from the USFDA. 
  • Reliance Industries' telecom arm -- Jio maintained the top position in the 4G speed chart with a 20.9 Mbps average download rate in September. 
  • Bajaj Finance is offering a convenient professional loan for medical professionals. 
  • Bharti Airtel has launched its Video Platform as a Service (CPaaS) - Airtel IQ Video.
News Analysis