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NSE Intra-day chart (31 October 2019)
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Market Commentary 01 November 2019
Benchmarks to open marginally in red amid weak global cues


Indian equity bourses receded from fresh record highs to close marginally higher on Thursday. The start of the day was fabulous, aided by Economist Intelligence Unit's report that India & China are projected to see accelerated economic growth in the fourth quarter of this year, bucking trends in the US & the European Union. It added that the real GDP growth of India in the December-ending quarter is expected to be the highest among G7 & BRICS nations. Traders also got comfort with a private report that Indian companies have ranked third in Asia's overall environmental sustainability out of eight markets studied, with an average score of 63.12, which is slightly exceeded the regional average of 62.34 points. In the last leg of the trading session, markets cut most of their gains, after credit rating agency, India Ratings and Research's (Ind-Ra) analysis of data of Annual Survey of Industries (ASI) indicated slowdown in labour productivity growth in the Indian organized manufacturing sector, which grew at an average annual rate of 3.7% during FY16-FY18 (FY11-FY15: 7.4%, FY06-FY10: 10.3%, FY01-FY05: 9.6%), however, it fell to 2.6% and 2.9% in FY17 and FY18, respectively. But, key indices managed to settle above their respective neutral lines, as Commerce and Industry Minister Piyush Goyal assured that start-ups will never be harassed and that the government is taking steps to promote them. Finally, the BSE Sensex gained 77.18 points or 0.19% to 40,129.05, while the CNX Nifty was up by 33.35 points or 0.28% to 11,877.45.


The US markets settled in red territory on Thursday amid renewed uncertainty about the potential for a long-term US-China trade deal. Optimism about phase one of a trade deal contributed to recent strength on Wall Street, but a new report stated that Chinese officials are casting doubts about reaching a comprehensive long-term trade agreement. As per a report, Chinese officials have warned in private conversations that they are unwilling to budge on the thorniest issues. Trump and Chinese President Xi Jinping had been due to meet and potentially sign the deal at the APEC summit in Chile, but the Chilean President recently called off the summit due to unrest in the country. However, upbeat earnings capped the losses in markets, with Apple (AAPL) and Facebook (FB) posting notable gains after reporting better than expected quarterly results. On the US economic front, the Labor Department released a report showing a modest increase in first-time claims for US unemployment benefits in the week ended October 26. The report said initial jobless claims rose to 218,000, an increase of 5,000 from the previous week's revised level of 213,000. Street had expected jobless claims to inch up to 215,000 from the 212,000 originally reported for the previous week. A separate report from the Commerce Department showed personal income and spending both increased in line with market participants estimates in the month of September. The report said personal income increased by 0.3 percent in September after climbing by an upwardly revised 0.5 percent in August. Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent, matching the revised uptick seen in August.


Crude oil futures ended sharply lower on Thursday, amid concerns over outlook for energy demand due to slowing economies and uncertainty about US-China trade deal. This was fourth successive session of losses in crude oil prices. Weak data out of China raised concerns about energy demand outlook. The National Bureau of Statistics showed that China's service sector logged weaker growth in October. Besides, data released by the Energy Information Administration on Wednesday showed US crude stockpiles rose by 5.7 million barrels in the week ended October 25. That was more than twice the expected jump. Benchmark crude oil futures for December declined 88 cents or 1.6 percent to settle at $54.18 a barrel on the New York Mercantile Exchange. December Brent lost 38 cents or 0.6 percent to settle at $60.23 a barrel on London's Intercontinental Exchange.


Erasing all of its initial gains, Indian rupee ended almost flat against dollar on Thursday, as rising crude oil prices kept investors edgy. Traders failed to take support with the Economist Intelligence Unit's report stating that India and China are projected to see accelerated economic growth in the fourth quarter of this year, bucking trends in the US and the European Union. It added that the real GDP growth of India in the December-ending quarter is expected to be the highest among G7 and BRICS nations. In the third quarter, India's real GDP growth is estimated to be 1% on a quarter-on-quarter basis and is projected to rise to 2.20% in the fourth quarter. On the global front, euro gained on Thursday as the dollar weakened after the Federal Reserve cut interest rates for the third time this year and left open the question of whether it would cut them further. Finally, the rupee ended at 70.92, 2 paise weaker from its previous close of 70.90 on Wednesday.


The FIIs as per Thursday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 12744.79 crore against gross selling of Rs 5150.28 crore, while in the debt segment, the gross purchase was of Rs 3353.32 crore with gross sales of Rs 2875.14 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.98 crore against gross selling of Rs 8.17 crore.


The US markets ended lower on Thursday on skepticism about a US-China trade truce and weakening manufacturing data. Asian markets are trading mostly in red on Friday on fresh concerns over Sino-US trade prospects. Indian markets hit a fresh record high intraday and ended with marginal gains on Thursday on positive global cues, as well as, positive sentiment on D-Street. Today, the markets are likely to make flat-to-negative start amid weakness in global markets. Traders will be concerned with the government data showing that output of core infrastructure industries shrank by 5.2% in September 2019 as seven of eight sectors witnessed negative growth. The eight core sectors had expanded by 4.3% in September 2018. During the April-September period, the growth of core industries fell to 1.3% against 5.5% in the year-ago period. There will be some cautiousness with report that India's fiscal deficit has widened in the first half of the current fiscal year. The fiscal deficit stood at Rs 6.52 lakh crore till September-end 2019, compared to Rs 5.95 lakh crore in the same period of the previous fiscal year. Low revenue collections have become a reason to worry about the fiscal deficit. Traders may take note of former Reserve Bank of India (RBI) governor Raghuram Rajan's statement that India needs new generation of reforms for economic growth. He also talked about the need for cleaning up the banking system. Meanwhile, putting in place a stricter framework, Sebi has directed all listed banks to disclose any divergence in bad loan provisioning within 24 hours of receiving RBI's risk assessment report, rather than waiting to publish the details in their annual financial statements. There will be some reaction in Non-banking financial companies (NBFCs) stocks as the finance ministry said public sector banks (PSBs) have extended support of Rs 2.56 lakh crore to NBFCs by way of credit and pooled buyout since September 2018 as part of efforts to provide much-needed liquidity to the sector. There will be some buzz in the infrastructure stocks with Icra's report that waiver of earnest money deposit for highway projects in EPC mode comes as a relief for mid-sized highway players. The auto sector stocks will also be in action, reacting to their monthly sales numbers. There will be lots of earnings announcements too, to keep the markets in action.


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  • Reliance Industries' subsidiary -- Reliance Brands has increased its equity shareholding in Future101 Design by 2.5% for a consideration of Rs 2 crore, taking its equity shareholding in Future101 to 17.5%. 
  • HDFC Bank has reached an important milestone of 525 branches in the city of Ghaziabad. 
  • Yes Bank has received a binding offer for a $1.2-billion funding from an overseas investor through fresh issuance of equity shares. 
  • IOC has reported a fall of 88.86% in its consolidated net profit at Rs 370.44 crore for Q2FY20 as compared to Rs 3326.64 crore for Q2FY19.  
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