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NSE Intra-day chart (16 September 2021)
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Market Commentary 17 September 2021
Markets to extend jubilation with a good start

 

Indian equity benchmarks closed at record closing highs for the third consecutive session on Thursday aided by gains in banking, energy and PSU stocks. Besides, a firm global market mood and recently introduced reforms for the telecom and auto sector pushed the indices to fresh peaks. Markets made positive opening, as sentiments got boost with report that the United Nations Conference on Trade and Development (UNCTAD) has pegged India's economic growth rate to hit a four-year high of 7.2 per cent for 2021 against a contraction of 7 per cent in 2020. At this rate, India would be the fastest growing economy after China, which is projected to grow by 8.3 per cent. Calculations are based on GDP at constant dollars in 2015. Further, some support came in as defence Minister Rajnath Singh said the trust between the government and the industry has gone up following the scrapping of the retrospective taxation regime and the Centre is open to new ideas to further boost the country's economic growth. Key indices extended gains in afternoon session, as traders remained positive with Niti Aayog Vice Chairman Rajiv Kumar's statement that the global economic recovery is strengthening and this is the opportune moment for a change in the world order. He emphasised that a new world order will usher in if the global economy remains open. Additional support came with private report stating that investments by private equity and venture capital funds surged to $10.7 billion in August from $2.2 billion in the same month last year, and $9.7 billion in July this year. Adding to the optimism, Retailers Association of India (RAI) in its latest survey has said that retail sales improved in August and reached 88 percent of the pre-pandemic levels. In July, retail sales stood at 72 per cent of the pre-pandemic levels of July 2019. Finally, the BSE Sensex rose 417.96 points or 0.71% to 59,141.16 and the CNX Nifty was up by 110.05 points or 0.63% to 17,629.50.

 

The US markets ended mostly lower on Thursday following report from the Labor Department showed first-time claims for US unemployment benefits rebounded by slightly more than expected in the week ended September 11th. The report said initial jobless claims climbed to 332,000, an increase of 20,000 from the previous week's revised level of 312,000. Street had expected initial jobless claims to rise to 328,000 from the 310,000 originally reported for the previous week. The modest increase came after initial jobless claims fell to their lowest level since March of 2020 in the previous week. Meanwhile, a report from the Commerce Department showed an unexpected rebound in US retail sales in the month of August. The Commerce Department said retail sales climbed by 0.7 percent in August after plunging by a revised 1.8 percent in July. The rebound surprised participants, who had expected retail sales to decrease by another 0.8 percent compared to the 1.1 percent slump originally reported for the previous month. Excluding a continued nosedive in sales by motor vehicle and parts dealers, retail sales surged up by 1.8 percent in August after tumbling by a revised 1.0 percent in July. Street had expected ex-auto sales to edge down by 0.2 percent compared to the 0.4 percent drop originally reported for the previous month. While the rebound in retail sales partly reflected a shift back to online spending amid the spread of the delta variant of the coronavirus, the resilience shown by consumers may encourage the Federal Reserve to follow through on plans to begin tapering its asset purchases later this year.

 

Crude oil futures ended flat on Thursday after hitting a multi-week high a day earlier as the threat to US Gulf crude production from Hurricane Nicholas receded. Traders remained cautious on concerns over China's decision to release some crude oil from its strategic petroleum reserve. China said last week that it plans to release oil from its strategic reserve in order to better stabilize domestic market supply and demand, and effectively guarantee the country's energy security. Crude oil futures unchanged to settle at $72.61 barrel on the New York Mercantile Exchange. November Brent crude rose 21 cents or 0.3 percent to settle at $ 75.67 a barrel on London's Intercontinental Exchange. 

 

Indian rupee ended weaker against the US dollar on Thursday, on increased demand for the greenback from importers and banks. Traders seem to have overlooked report that United Nations Conference on Trade and Development (UNCTAD) has pegged India's economic growth rate to hit a four-year high of 7.2 per cent for 2021 against a contraction of 7 per cent in 2020. At this rate, India would be the fastest growing economy after China, which is projected to grow by 8.3 per cent. Meanwhile, defence Minister Rajnath Singh said the trust between the government and the industry has gone up following the scrapping of the retrospective taxation regime and the Centre is open to new ideas to further boost the country's economic growth. On the global front; sterling rose against the euro and fell versus the dollar on Thursday as traders assessed the Bank of England's next move after data showed British inflation hit a more than nine-year high in August, fuelling expectation of a rate increase. Finally, the rupee ended 73.52, weaker by 2 paise from its previous close of 73.50 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in equity segment and net sellers in debt segment. In equity segment, the gross buying was of Rs 9703.34 crore against gross selling of Rs 8870.73 crore, while in the debt segment, the gross purchase was of Rs 957.68 crore with gross sales of Rs 1057.20 crore. Besides, in the hybrid segment, the gross buying was of Rs 1466.16 crore against gross selling of Rs 11.10 crore.

 

The US markets ended mostly lower on Thursday as investors weighed mixed signals in the latest US economic data. Asian markets are trading mostly lower in early deals on Friday following mixed cues from US markets. Indian equity markets settled at fresh closing highs on Thursday. Today, the start is likely to remain jubilant and the markets will extend their gains encouraged by Union Finance Minister Nirmala Sitharaman's statement that the National Asset Reconstruction Company (NARCL) would be operational soon, and it had to ensure resolving bad loans within five years, beyond which the guarantee to be issued by the government would expire. The Cabinet approved a government guarantee of Rs 30,600 crore to be provided for the security receipts issued by the NARCL to buy bad loans of lenders. There will be some support as the Reserve Bank of India (RBI) said the inflation trajectory is coming down faster than anticipated and the inflation print of 5.3 per cent in August has proven the monetary policy committee's (MPC) move to look through May's price shock as the right call. Meanwhile, RBI in its latest article has said that the uptick in the credit growth in the recent months notwithstanding the second COVID-19 wave augurs well for the economy. Bank credit growth has witnessed significant fluctuations in the past one and a half decades. It said the period between 2007-08 and 2013-14 could be characterised as a bank credit boom period in the Indian economy, as non-food credit registered double-digit growth, primarily driven by robust credit growth to the industrial sector. Traders may take note of report that European Commission and the High Representative adopted a Joint Communication on the EU Strategy for cooperation in the Indo-Pacific. This is seen as a major development for the region ahead of the first in-person Quad meeting in Washington next week, in which key players of the Indo-Pacific i.e. India, Japan, Australia and the US are taking part. There will be some buzz in aviation stocks on report that the Directorate General of Civil Aviation (DGCA) said around 6.7 million domestic passengers travelled by air in August, 33.83 per cent higher than 5 million who travelled in July. The cap on capacity was increased to 72.5 per cent from August 12. Earlier airlines could only operate up to 65 per cent of their capacity. All airlines have reported an increase in load factors.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,629.50

17,545.10

17,679.25

BSE Sensex

59,141.16

58,826.34

59,330.13

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ITC

149.24

230.30

219.85

237.20

Bharti Airtel

441.73

715.75

708.43

730.03

SBIN

426.37

465.00

449.80

473.15

Indusind Bank

272.30

1,131.00

1,072.50

1,188.00

Tata Motors

262.49

311.00

307.43

314.78

  •  Power Grid Corporation of India has infused fresh equity of Rs 407.49 crore in Energy Efficiency Services, a Joint Venture Company of Power Grid, NTPC, PFC and REC.
  •  Tata Motors has launched its first electric sedan under the XPRES brand - the XPRES-T EV, exclusively for fleet customers, with a price starting at Rs 9.54 lakh.
  •  Infosys has launched Infosys Equinox to help enterprises securely deliver hyper-segmented, personalized omnichannel commerce experiences for B2B and B2C buyers.
  •  Wipro has secured a multiyear contract from Kuala Lumpur- headquartered Maxis Broadband Sdn Bhd, a leading converged solutions provider.
News Analysis