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Stock Market Daily Updates: 10 Aug 2020

In my opinion, after the end of the Coronavirus problem in the next few quarters, the government will spend a huge amount of capital to accelerate economic growth and this will start a new earning growth cycle in India.

Photo Credit :

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Dear Trader…

The Corona epidemic has swept the world economy. However, India's position on this issue has become more serious. Corona cases in India have been steadily rising in July since the unlock phase began last June, which has once again stalled the growth seen in the early stages of unlocking. On the other hand, geopolitical challenges have also arisen. The lockdown, which took effect at the end of March, had adversely affected the exchequer as economic activity at all levels came to a standstill.

The government has set a target of Rs 16.35 lac crore for the full year, out of this, only 8 per cent of revenue has been generated in the first three months of the current financial year. On the other hand, corporate income has also declined by 23% on the back of declining tax revenue. The government had also set a high disinvestment target in the current financial year but the process is also taking time due to Corona. Thus government revenue has declined at all levels.

For the first time, the US economic growth slowed to an annualized 32.90% in the April-June quarter since the GDP figures were released in 1947. Demand stalled amid the lockdown had an impact on GDP. Massive declines were expected in the second quarter. However, recovery is expected later. The recovery in the United States has been slowed by a resurgence of corona cases and lockdowns in many areas. The US Federal Reserve decided to keep its meeting interest rate close to zero.

The results of the Reserve Bank's monetary policy were reviewed and the repo rate was not changed. The third meeting of the Reserve Bank's monetary policy review was held during Corona's tenure. Meetings have been held twice before due to the Corona crisis.

The first meeting was held in March and then the second meeting was held in May 2020. In both these meetings, the repo rate of the Reserve Bank was cut by a total of 1.15%. Last year, after February 2019, the repo rate was cut by a total of 2.50%. Reserve Bank Governor Shaktikant Das said the decision has been taken to keep the repo rate at 4%. While the reverse repo rate is also stable at 3.35%.

Friends, Recovery in rural areas, better than normal monsoon, higher agricultural income and less deterioration of the retail segment in rural areas compared to urban markets saw new gains in the Indian stock market with signs of improvement in the Indian economy. Despite signs of recovery in the Indian economy, demand recovery from local lockdowns by some states has been uncertain. Each state is implementing a lockdown in its own way and the recovery of the Indian economy in the coming days depends on the state of the lockdown and this matter will play an important role in the recovery.

The current price of stocks in the Indian stock market paints a grim picture of the world. The market is not worried about the softening of Corona virus-related economic activity.

Central banks around the world are implementing zero interest rates and other unconventional monetary policies, creating huge liquidity in the system.

The US dollar is depreciating and government bond yields are near record lows worldwide. The recent move by the regulatory body will have a severe impact on liquidity in the Indian stock market. However, in the long run regulators will change their approach and increase liquidity in the Indian market.

In my opinion, after the end of the Coronavirus problem in the next few quarters, the government will spend a huge amount of capital to accelerate economic growth and this will start a new earning growth cycle in India. According to my personal advice, a wise investor should book profit in every stage of the trend

Here are the Trading Idea

Nifty Future opened @ 11274 as on 10.08.2020

For Trading, Nifty Future has resistance at 11303 – 11318 Point; above which other resistance levels are at 11330 – 11373 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11233– 11202 Point; below 11202 Point, other support levels are at 11188 – 11160 Point.

I am positive for the next bullish trend only above @ 11288 Point but be with the trend. Let the market decide further moves. As we are saying from many days, Buying is suggested in falls only...and it’s still a better strategy in the given Scenario

Regarding Long term positions, it is preferable to remain cautious now

If Nifty Future crosses @ 11288 Point, again then the upper side target is quite high and it may touch @ 11303 Point in the short term 

Bank Nifty Future opened @ 21851 as on 10.08.2020

For Weekly, Bank Nifty Future has resistance at 21909 – 22008 Point; above which other resistance levels are at 22120 – 22202 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 21737 – 21676 Point; below 21676 Point, other support levels are at 21474 – 21404 Point.

I am positive for the next bullish trend only above @ 22202 Point but be with the trend. Let the market decide further moves. As we are saying from many days, Buying is suggested in falls only...and it’s still a better strategy in the given Scenario

Regarding Long term positions, it is preferable to remain cautious now

If Bank Nifty Future crosses @ 22202 Point, again then the upper side target is quite high and it may touch @ 22373 Point in the short term

Trading Idea for the derivative stocks….

MAHINDRA MAHINDRA FO @ RS 608

Positive Trend @ Rs 608 / 593 with Stop loss of Rs @ 586 for the target near @ Rs 622 - 630 in short term 

BHARAT PETRO FO @ RS 416

Positive Trend @ Rs 416 / 404 with Stop loss of Rs @ 393 for the target near @ Rs 433 - 440 in short term

AXIS BANK FO @ RS 436

Positive Trend @ Rs 436 / 430 with Stop loss of Rs @ 418 for the target near @ Rs 447 - 460 in short term 

ACC LTD FO @ RS 1400

Positive Trend @ Rs 1400 / 1388 with Stop loss of Rs @ 1380 for the target near @ Rs 1417 - 1430 in short term 

MARUTI CLOSED FO @ RS 6644

Negative Trend @ Rs 6640 / 6700 with Stop loss of Rs @ 6730 for the target near @ Rs 6588 - 6560 in short term 

HCL TECHNO FO @ RS 694

Negative Trend  @ Rs 693 / 707 with Stop loss of Rs @ 717 for the target near @ Rs 680 - 673 in short term

TATA STEEL FO @ RS 405

Negative Trend  @ Rs 405 / 414 with Stop loss of Rs @ 422 for the target near @ Rs 396 - 388 in short term 

CENTURY TEXT FO @ RS 329

Negative Trend  @ Rs 328 / 338 with Stop loss of Rs @ 344 for the target near @ Rs 316 - 309 in short term 

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Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Nikhil Bhatt | Research Analyst - SEBI

The author is a well established entrepreneur having a more than 16 years of experience in the field of stock market and financial management.

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