Daily Market Wrap - July 9, 2021 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities
(Time Zone: UTC)
Indian benchmark equity indices ended lower for the second consecutive session on July 09. The Nifty opened lower, made an intra day low at 0925Hrs and then gradually rose. At close, the Nifty was down 38.10 points or 0.24% at 15,689.80.
Volumes on the NSE were the lowest in 4.5 months. Among sectors, Realty and Metals gained the most, while Energy, IT, Banks and Capital Goods lost the most. BSE midcap and smallcap indices rose 0.4-0.6 percent.
Asian shares stumbled to two-month lows on Friday, though they recovered from the intra day lows post the China rate cut announcement and were set for their worst weekly performance since mid-May as confidence took a battering over the global spread of the Delta virus variant and worries it could stall a worldwide economic revival. European stocks however rebounded from a recent selloff driven by concerns that a pandemic resurgence could complicate a global recovery, 10-year U.S. Treasury yield rose to 1.33% from the low of 1.25% on Thursday, its lowest since February.
China's central bank said on Friday it would cut the amount of cash that banks must hold as reserves, releasing around 1 trillion yuan ($154.19 billion) in long-term liquidity to help underpin an economic recovery that is starting to lose momentum. The People's Bank of China (PBOC) said on its website it would cut the reserve requirement ratio (RRR) for all banks by 50 basis points (bps), effective on July 15.
Nifty closed lower for the second consecutive week, down 0.21% over the week as worries return over the global economic recovery amid the spread of Covid-19 variants. On daily charts however, the Nifty has formed a doji after a fall suggesting indecision at these levels and a possibility of an upward bounce. Nifty also made a double bottom in the 15633-15635 band. On upmoves, Nifty could face resistance at 15762-15801 band over the next 1-2 sessions, while on a weekly basis, it could face resistance in the 15886-15915 band. 15635 could be a support for the near term while 15506 could be a support for the coming week.