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2 July 2021, Pre Market Report: Auto sector & IT will be the hope for the day.

Good Morning, everyone, Markets continued to fall yesterday too as you must have read the post-market report. If you have not read that, you can read it by clicking here.

Global Markets:

US markets continued to rally and S&P 500 again broke its records to again close at an all-time high. The Dow Jones Industrial Average rose 131.02 points, or 0.38%, to 34,633.53, the S&P 500 gained 22.44 points, or 0.52%, to 4,319.94 and the Nasdaq Composite added 18.42 points, or 0.13%, to 14,522.38.

US jobless claims fall to 364,000, a new pandemic low, the number of Americans applying for unemployment aid fell again last week to the lowest level since the pandemic struck last year, further evidence that the job market and the broader economy are rebounding rapidly from the coronavirus recession.

The Labor Department reported Thursday that jobless claims dropped by 51,000 to 364,000. Applications for unemployment benefits have fallen more or less steadily since the year began. The rollout of vaccines has sharply reduced new COVID-19 cases, giving consumers the confidence to shop, travel, eat out and attend public events as the economy recovers. This further adds to positivity in the US market.

Asian markets also have opened slightly positive compared to negative opening for last 2 days. The Nikkei 225 in Japan nudged 0.3% higher while the Topix index gained 0.81%. South Korea’s Kospi rose 0.25%.

Indian Market:

Trends on SGX nifty seem like we can see yet another gap up opening of the market today at around 15700-15750. But we have been seeing in the past few daya that the market opens with a gap up and then falls continuously. However, now that market has come to this crucial support, I feel today can be a deciding day for the next few weeks. If markets take to support and move higher today, we can see more bullish moves soon, else we can confirm the bearing nature for the next few weeks. So watch out, today can be a deciding day.

Things are looking positive, like auto sales data has come out good, so the auto sector can get an uplift, TCS has partnered with John Wiley & Sons, an American multinational publishing company, to modernise its e-commerce platform with SAP Commerce, creating a unified, seamless customer experience, which can support IT sector today.

But banks are still weak as the gross non-performing asset (GNPA) ratio of banks may rise to 9.8-11.22 percent by March 2022 under various stress scenarios due to the impact of the COVID pandemic, the Reserve Bank of India (RBI) said in its July 2021 edition of the Financial Stability Report (FSR).

So today it might be Banks vs IT & Auto sector. If Reliance supports, we can see the bulls back in the market.

Foreign institutional investors (FIIs) net sold shares worth Rs 1,245.29 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs 880.60 crore in the Indian equity market on July 1. DIIs continuing to buy in the market during this fall gives us hints and confidence of the bulls coming back soon.

Stock Specific News:

Tata Consultancy Services | The company has partnered with John Wiley & Sons, an American multinational publishing company, to modernise its e-commerce platform with SAP Commerce, creating a unified, seamless customer experience.

Hero MotoCorp | The company’s total motorcycles and scooters sales in June 2021 rose 3.8 percent to 469,160 units as against 451,983 units in the corresponding month last year.

Coal India | The company’s coal production in June 2021 increased 2 percent YoY to 40 million tonnes, and offtake jumped 23 percent YoY to 51.3 million tonnes.

Lupin | The United States Food and Drug Administration (USFDA) has approved the company’s US-based arm’s supplemental new drug application (sNDA) to expand the use of Solosec to include the treatment of trichomoniasis in adults.

NMDC | The company sold 3.18 million tonnes of iron ore in June 2021, higher from 2.48 million tonnes of iron ore sold in June 2020. The production of iron ore stood at 2.98 million tonnes against 2.52 million tonnes in the same period.

Eicher Motors | Royal Enfield sales in June 2021 rose 13 percent to 43,048 units as compared to 38,065 units, MoM.

NCC | The company received five new orders totaling Rs 2,149 crore in June.

Coforge | The company’s board will meet on July 6 to consider a proposal for raising funds.

Capacit'e Infraprojects | ICICI Prudential Asset Management Company sold 98,537 equity shares (or 0.15 percent of the total paid-up equity) via an open market transaction on June 29, reducing stake to 2.95 percent from 3.09 percent earlier.

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