Zubu Client Sentiment Nifty50 Report & Market Recap (Oct-30-2020)

Zubu Client Sentiment Nifty50 Report:

It is a Post Market Analysis, by which one can understand Retail trader’s sentiment and discover who was going long and short, the percentage change over time, and whether market signals are bullish or bearish.

Zubu Client Sentiment Nifty50 Report (Oct-30-2020)

Nifty50 retail trader data shows 61.66% of traders are net-long ,while the number of retail traders net-short was 38.34%. FII’s created decent longs 1777 & huge shorts 14925, while retailers created huge longs 14452 & unwind-ed marginal shorts -648.

Market Recap:

The markets started the day on a weak note and briefly moved into the green before slipping back into negative territory. Most sectoral indices declined on the monthly derivative expiry day. The Nifty IT index (+0.3%) was the sole gainer, while the Nifty Media (-1.8%) and Nifty Auto (-0.9%) indices suffered the most. L&T (-4.8%), Titan (-3.2%) and Adani Ports (-2.9%) were the top losers while Asian Paints (3.0%), Tech Mahindra (2.2%) and Ultratech (1.8%) were top gainers in the Nifty50.

Pandemic dents L&T’s Q2 results
L&T’s consolidated Q2 revenues from operations dropped 12.2% on a year-on-year basis as the pandemic impacted operations. However, sequentially revenues are up 46% indicating a pickup in momentum, with labour at various project sites back to pre-Covid levels. The company’s net profit (before exceptional items) fell 45% as compared to the same period last year owing to lower revenue, disruption of metro services and higher provisions in the financial services business. The stock was down 4.8% today as investors chose to book profits, especially after the 9% rise seen this month till yesterday (versus 4% rise in the Nifty50). The company mentioned that if the current moderation in Covid cases is sustained (along with a vaccine in sight), recovery could gather pace. The buzz over stimulus 4.0 (with infrastructure focus) could help in improving investor sentiments if the stimulus goes through.

Axis Bank falls on profit booking

Axis Bank’s Q2 results were above expectations and the bank delivered net profit of ₹1,683 crore (versus a net loss of ₹112 crore last year). However, profit booking hit the stock, which had already risen 19% in October ahead of the results. Shares of Axis Bank were down 2.3% today. The bank’s Q2 net interest income grew by 20% on a year-on-year basis to ₹7,326 crore, as steady growth in deposits helped loan growth. Further, asset quality improved with gross non-performing asset ratio falling to 4.18% from 5.03% in the previous year. The figures would be slightly higher at 4.28%, considering the Supreme court’s order related to NPAs. While the scenario looks promising as major large banks have delivered a good set of numbers for Q2, hopes are pinned on how the business grows in the second half of the fiscal.

Crude oil slips on weak demand outlook

This week, crude oil prices are down ~6%, with the demand outlook again looking weak. The second wave of coronavirus infections in Europe and the US is triggering fresh lockdowns, which could lower the demand for oil. Further, the recent data release shows that US crude inventories are highest since July, indicating excess supply. Fading hope of a fresh stimulus in the US, in the near term, is not helping either. Given the above scenario, it is not surprising that crude oil prices have fallen drastically this week, even as two-thirds of the US Gulf crude oil production is shut due to Hurricane Zeta.

Closing bell
Investor confidence appears to be shaky at the moment and resonates with what is happening in the global equity markets. The Dow Jones in the US (-6.4%), Germany’s DAX (-8.2%) and France’s CAC (-6.6%) are all down this week. One could expect volatility to rise in the markets tomorrow as four US tech giants (Apple, Amazon, Google and Facebook) will announce September quarter results today evening (India time). Further, index heavyweight Reliance Industries will report its Q2 earnings tomorrow. We’ll bring you all the details!