Equity benchmark Sensex on Thursday plunged for the second day in a row, tracking global cues as a dovish stance by the US Federal Reserve failed to alleviate investor concerns over slowing growth and rising coronavirus cases. While the 30-share BSE benchmark closed 335.06 points or 0.88 per cent lower at 37,736.07, the broader NSE Nifty dipped 100.70 points or 0.90 per cent to end at 11,102.15. IndusInd Bank, HDFC, Axis Bank, PowerGrid, SBI, Bajaj Finserv and Bharti Airtel were top laggards. Sun Pharma, Maruti, Infosys and RIL were among the gainers.
"Unlock 3.0 failed to enthuse, as earnings results took priority and markets turned volatile in the expiry session. Financials led the losses for the benchmark index," said Vinod Nair, Head of Research at Geojit Financial Services.
Here are 7 things to know before Friday's opening bell
RIL Q1 results
Reliance Industries Limited (RIL) on Thursday reported a 31.16 per cent rise in consolidated profit at Rs 13,248 crore, including one time gain of Rs 4,966 crore, in April-June quarter of fiscal 2020-21 as against profit of Rs 10,104 crore in the corresponding period of last year. Revenue of Mukesh Ambani-led oil-to-telecom conglomerate stood at Rs 1,00, 929 crore in the quarter under review.
Other earnings
Among other major companies to announce Q1 earnings today, HDFC's profit after tax (PAT) fell 5 per cent on-year to Rs 3,051 crore. FMCG major Dabur's Q1 net profit fell 5.9 per cent to Rs 341.8 crore and volumes declined 9.7 per cent.
F&O expiry
Markets also turned choppy on the expiry of July derivatives. Today was the last day of the futures and options contracts (F&O) for the July series. "Nifty closed the July series with decent gains of 7.90 per cent from 10,228 to 11,102 levels. On a provisional basis it has seen Rollover of 71.30 per cent vs previous month actual rollover of 78.93 per cent and 3 month average of 75.30 per cent. Overall we believe that the OI position is intact but even after market move, longs are not increasing, indicating some sort of consolidation or profit booking decline before starting the next leg of rally. Medium term trend could remain intact to bullish till it holds 10,550 zones. Nifty index settled with a negative roll cost of (-) 0.16 per cent," said Chandan Taparia, Derivative & Technical Analyst, Motilal Oswal Financial Services.
US GDP fall
The US economy contracted at its steepest pace since the Great Depression, collapsing at a 32.9 per cent annualised rate last quarter. It is the steepest decline in output since the government started keeping records in 1947.
Global bourses
Bourses in Shanghai, Hong Kong and Tokyo ended in the red, while Seoul closed on a positive note. Stock exchanges in Europe were trading with losses in early deals. While Europe's STOXX 600 slipped 0.7 per cent, the MSCI world equity index, which tracks shares in 49 countries, was 0.3 per cent lower.
Coronavirus cases
Coronavirus cases in India crossed the 50,000 mark in a single day for the first time, pushing the virus tally to 15,83,792, while the recoveries went past 10 lakh on Thursday, according to Health Ministry data. The death toll climbed to 34,968 with 775 people succumbing to the disease in a day. Globally, the number of COVID-19 cases has crossed 1.68 crore, with more than 6.61 lakh fatalities.
Technical insights
"The short term trend of Nifty seems to have turned down and a move below 11,000 levels could confirm short term trend reversal in the market. A decisive move below 10,900 is expected to drag Nifty to further lows up to 10,700-10,650. On the way up, 11,300 is going to be a strong overhead resistance," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
"We're not surprised by the recent profit-taking phase and expect further correction ahead. Markets will first react to the index heavyweight, Reliance results in the early trade on Friday i.e. July 31 and that may set the tone for the rest of the session. Traders should keep a close eye on 11,050 in Nifty as its breakdown would trigger a fresh decline towards 10,950 levels else consolidation will continue. Traders should prefer hedged bets and maintain positions on both sides," said Ajit Mishra, VP - Research, Religare Broking.
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