Market Watch for 12th October 2020

Market Watch for 12th October 2020

The Indian markets rose nearly one per cent on Monday, ahead of the press conference of Finance  Minister  Nirmala  Sitharaman  on  economic  issues  at  12:30  pm  today.Among headline  indices, in early trades, the  S&P  BSE  Sensex  gained  300  points  to  40,860  levels, and  the  Nifty 50  index  reclaimed  the  psychological  level  of  12,000  for  the  first  time  since February 24, 2020. At 10:30 AM, the frontline S&P BSE Sensex was trading at 40,768, up 258 points or 0.64%. Market breadth is positive and out of a total of 2,269 shares traded on the Bombay Stock Exchange,  982 advanced while  1,140 declined  and 147 remained unchanged. The  broader Nifty 50 was at 11,973 levels,up 59 points or 0.5%. The  trend  among  Nifty  sectoral  indices  was  mixed,  with  Nifty  Bank  index,  up  1%,  leading the list of gainers.The  broader  market  continued  to  under perform,  with  the  S&P  BSE  Midcap  and  Smallcap indices trading 0.3% higher, each.

Benchmark  indices  registered  strong  gains  during  the  week  as  companies  released  strong Q2  business  updates.  The  RBI  announced  a  slew  of  liquidity  measures  to  support  the economy on Friday. The Sensex settled above 40,500 level while the Nifty 50 index settled above 11,900 mark Positive global cues also boosted sentiment. IT  stocks  logged  strong  gains  during  the  week.  In  the  week  ended  on  Friday,  9  October 2020, the Sensex surged 1,812.44 points or 4.68% to settle at 40,509.49. The  Nifty 50  index  jumped  497.25  points  or  4.36%  to  settle  at  11,914.20.  The  BSE  Midcap index fell 47.7 or 0.32% to settle at 14,765.55. The BSE Smallcap index shed 4.23 points or 0.03% to settle at 14,966.21.

Global Markets:

Chinese stocks led Asian markets higher on Monday as investors bet on a steady recovery for the world’s no. 2 economy, though caution about the fate of US stimulus kept the dollar firm and a central bank policy tweak unwound some of the yuan’s gains. MSCI’s broadest index of Asia-Pacific  shares  outside  Japan rose  0.8%  to  2-1/2-year  highs, buoyed by a 2% gain in Chinese blue chips and a 1.5% rise by Hong Kong’s Hang Seng index. Japan’s Nikkei slipped 0.3% as investors fretted about corporate earnings.

Crude Oil& Gold: Brent crude futures slipped 0.9% to $42.48 a barrel and US crude futures were down about 0.8% at $40.26.Gold  held  steep  Friday  gains  at  $1,927  an  ounce  as  investors  stuck  with  bets  that  US stimulus would eventually arrive and drive inflation to the benefit of bullion.

Indian Rupee: The rupee strengthened by 8 paise to close at 73.16 (provisional) against the US  dollar  on  Friday  after  the  Reserve  Bank  of  India  decided  to  keep  benchmark  interest rate unchanged.

FPIs & DIIs: Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 39.39 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 126.61 crore, data suggests.10-year Bonds:India 10-year bond yield fell 1.30 per cent to 5.93 after trading in 5.92-6.04 range.

Week Ahead

Quarterly results, macro data, movement of rupee against the dollar, Brent crude oil price movement  and  investments  by  foreign  portfolio  investors  (FPI)  and  domestic  institutional investors (DII) will be watched.

Global  cues  will  continue  to  be  in  focus  as  resurgence  in  virus  cases  around  the  world, leads  to  more  restrictions  and  more  pressure  on  economic  recovery.  Updates  related  to COVID-19  will  be  closely  watched.  Also  on  the  radar  will  be  news  on  Covid  vaccine development.  From  here  on  the  pace  of  the  improvement  of  economic  indicators  along with outcomes of a possible vaccine or cure for COVID-19 would determine the movement of the market.

Markets across the globe will continue to remain volatile. US President Donald Trump and Joe  Biden,  the  Democratic  nominee,  wrapped  up  their  first  presidential  debate  on  29 September   with   heated   exchanges.   Two   more   debates   between   the   presidential candidates are scheduled to Tuesday, 3 November 2020.

China will announce inflation rate for September on 15 October 2020. The US inflation rate for  September  will  be  announced  tomorrow.  US  Retail  Sales  for  September  will  be announced on 16 October 2020. 

In Europe, the ZEW Economic Sentiment Index for October will be declared tomorrow.

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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