Morning Newsletter - October 8, 2020 - YES Securities
US stocks rebounded post Tuesday's decline on hopes of fiscal stimulus package after called for specific stimulus to the ailing sector. Increased risk appetite also resulted in weaker Treasury prices. Back home, search of new leaders has thrown open opportunities of new sector leaders every day.
The benchmark index has recouped almost entire decline of its August-September month in comparatively fewer trading sessions, suggesting strength in recent pullback. Also, in last few days, sector rotation is seen alongwith an uptick in index. The search of new leaders has thrown open opportunities of new sector leaders every day, today's session was dominated by gains in cement & auto stocks. Post positive opening, Nifty soon entered in negative territory, however renewed buying interest emerged near mid-point of the Tuesday's range; eventually it resumed its up move and notched up gains of 76 points. Among the index constituents, RIL, Bajaj Auto, HDFC Bank & Infy were the major gainers. Gaining for the straight fifth session, BankNifty surpassed 23k. Follow-up action needs to be closely watched as levels of 23,100-23,200 had stalled July month's rally.
- Momentum refuses to die down for Indian markets as Nifty inching near 11,800 mark, SGX Nifty indicates positive start for the day.
- Short covering on heavy weights likes of Reliance & HDFC along with Bank Nifty seen, ATM vols back above 20 mark as traders betting for volatile moves likely to continue.
- Options front, trend of call unwinding and aggressive put writing continues as expectation of momentum carry forward is higher in near term for Nifty index.
- FII's long buildup on index futures to tune of ~8k net contracts seen while no major directional bias seen from index options data.
In the currency markets, there is very little going on as the dollar has been unable to build on previous gains. Investors still remain focused on the stimulus talks as the short-term driver.
Volatility returned in the commodity universe after President Trump's abrupt decision to suspend negotiations with the Democrats over a stimulus package. In a tweet, Mr. Trump said that the $1.6 trillion on offer was more than sufficient to seal a deal and the fact that the Democrats were pushing for more did not sit well with him. He did say that he would revisit the situation immediately after the election.
- Maintaining asset quality a priority, says new SBI chief. - Glenmark Pharma gets USFDA nod to market drug for relapsing multiple sclerosis. - India Power aims to become preferred partner of state governments. - Amazon sends legal notice to Future Group over Reliance deal. - COVID-19 impact: Homebuyers prefer ready projects; southern cities lead completions. - Bandhan Bank's collection efficiency improves in September.
- No intention of scrapping MSP: FM. - Govt sources rule out voting on GST compensation issue. - MEITY nod to 16 mobile companies under PLI scheme. - World economy faces a long and hard climb out of the pandemic: IMF Chief. - Govt appoints M Rajeshwar Rao as new deputy governor of RBI. - Cabinet approves revised cost of Rs 8,575 cr for East-West Metro Corridor project. - States seek inputs for revising clean vehicle policies; EVs may get cheaper. - Government allows complete marketing freedom for natural gas. - Majority of generic drug ingredients produced in India & China: European Study.