Analysts believe that domestic equities are likely to continue to remain in a bullish phase with the earnings season underway and India Inc reporting a faster than expected pickup. Share Market News Today | Sensex, Nifty, Share Prices LIVE: After having surged for eight-days straight, Sensex and Nifty may start the hunt for a nine day rally down in the red. SGX Nifty was trading 35 points lower during the early hours of trade, hinting at a gap down start for domestic indices. On Monday S&P BSE Sensex ended 84 points or 0.21% higher while the Nifty 50 closed at 11,930 mark after having crossed the 12,000 mark during the opening session. Analysts believe that domestic equities are likely to continue to remain in a bullish phase with the earnings season underway and India Inc reporting a faster than expected pickup. Banks are likely to be in focus today with the Supreme Court set to hear the loan moratorium case today.
The Consumer Price Index (CPI) inflation reached an eight-month high of 7.34% in September. “The rise in inflation was due to broad-based increases in food prices, while core inflation stayed sticky,” said Rahul Bajoria, Chief India Economist, Barclays. Along with this, the Index of Industrial Production (IIP) declined 8%, the six consecutive month of negative growth. However, analysts believe that there has been improvement in IIP data. Care Rating said that the negative growth is likely to continue in September but the degree of contraction will be sharply lower ahead of the festive season demand.
Highlights
Finance minister Nirmala Sitharaman on Monday sought to create additional demand of Rs 1 lakh crore in the economy in the current financial year, through a clutch of steps that may involve less than Rs 40,000 crore or a tenth of the amount to be saved via expenditure controls already announced, as budgetary cost to the Centre.
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Johnson & Johnson said its Covid-19 vaccine study has been temporarily halted after a clinical trial participant experienced an unexplained illness, the second time that a front-runner developer has paused a trial amid the intensifying race to create a viable immunization against the virus. The New Brunswick, New Jersey-based company said in a statement late Monday the participant’s illness is being evaluated, and that it would share more information after further investigation. J&J’s statement confirmed an earlier report by health-care news provider STAT that the study was paused.
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Domestic equity market benchmarks BSE Sensex and Nifty 50 rallied for the eighth session on the trot on Monday, starting the week on a positive note. But trends on SGX Nifty suggested that this eight-day rally may take a halt today. Market participants will react to macroeconomic data released after market hours yesterday. Retail inflation reached an eight-month high of 7.34 per cent in September, while industrial output continued to contract in August. Besides, rising coronavirus cases, oil prices, stock-specific developments, rupee movement and other global cues will continue to sway investor sentiment.
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"Technically, Nifty has been trading in a Higher Top Higher Bottom formation since the last many days which is a continuation formation and indicates further upside movement. Moreover, it has been trading above its 21 Days Moving Average also which suggests a positive trend for the time being," said Sumeet Bagadia, Executive Director, Choice Broking. At present, Nifty has strong support at 11900 while upside resistance comes at 12080/12150 levels.
"Nifty shifted into a consolidation with narrow range movement on Monday and closed the day higher by 16 points. A small negative candle was formed with upper and lower shadow. Technically, this pattern could be considered as a high wave type pattern which reflect high volatility in the market at the swing highs," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. He added that the overall market breadth has been a area of concern for the benchmark Nifty over the last few sessions.
The Securities Appellate Tribunal (SAT) has quashed a Securities and Exchange Board of India (Sebi) order imposing a penalty of Rs 20 lakh on Dewan Housing Finance Corporation (DHFL) for not complying with norms while issuing non-convertible debentures (NCDs) in 2016-17.
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"August IP took a bit of a pause, as activity improvement moved side-ways, but we expect improvement to resume from September," Rahul Bajoria, Chief India Economist, Barclays. "We continue to expect the economy to experience negative growth in Q3 2020 (July-September), but some improvement is likely relative to the previous quarter of -23.9% y/y growth decline. Recent economic data has shown some signs of a rebound, but underlying recovery will still likely be gradual. Recently, RBI published its own GDP forecast, expecting a 9.5% contraction in FY21, expecting GDP to remain in contractionary territory until Q3 FY20/21," he added
Industrial production declined by 8 per cent in August, mainly due to lower output of manufacturing, mining and power generation sectors, official data showed on Monday.
According to the Index of Industrial Production (IIP) data, manufacturing sector production registered a decline of 8.6 per cent, while the output of mining and power segments fell 9.8 per cent and 1.8 per cent, respectively.
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Pushed by rising prices of essential kitchen items, the retail inflation rose to an eight-month high of 7.34 per cent in September, making the RBI’s task to push growth by reducing the interest rate even more difficult in coming the days. The Consumer Price Index (CPI)-based inflation was 6.69 per cent in August and 3.99 per cent in September 2019.
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