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NSE Intra-day chart (01 October 2018)
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Market Commentary 03 October 2018
Markets likely to make positive start


Snapping three days of losing streak, Indian equity benchmarks ended the Monday's trade in green terrain with frontline gauges reclaiming their crucial 36,500 (Sensex) and 11,000 (Nifty) levels. After a weak start, the key indices remained lackluster for the most part of the trading session, impacted by India Meteorological Department's (IMD) report stating that at the end of the four-month-long monsoon season this year, the rainfall recorded in the country as a whole has remained 9% short of the normal mark. Domestic sentiments were also pessimistic with the RBI's report stating that India's external debt declined 2.8% to $514.4 billion at June-end over the previous quarter on account of a decrease in commercial borrowings, short-term debt and non-resident Indian (NRI) deposits. Some concerns also came with a report that overseas investors pulled out a massive Rs 21,000 crore ($3 billion) from the capital markets in September, making it the steepest outflow in four months, on widening current account deficit amid global trade tensions. However, the last hour buying by the traders coupled with positive macroeconomic data helped the key indices to recover their losses. Business activity in Indian manufacturing sector picked up in the month of September 2018, amid firmer gains in new orders, output and employment. As per the survey report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 52.2 in September from 51.7 in August. Besides, Goods and Services Tax (GST) mop-up rose to Rs 94,442 crore in September, from Rs 93,690 crore in the previous month. Adding some relief, ASSOCHAM's latest report showed that India's exports hold a promising outlook, with the US economy growing at its best in four years coupled with the rupee depreciation leading to enhanced net revenue realizations. The market participants took some support with the joint report between the International Monetary Fund (IMF), World Trade Organization (WTO) and World Bank stating that India's economic reforms and growth story provides compelling indication that openness in services contributes to long run growth performance. Finally, the BSE Sensex gained 299.00 points or 0.83% to 36,526.14, while the CNX Nifty was up by 77.85 points or 0.71% to 11,008.30.


The US markets closed choppy trading day mostly in red on Tuesday, while the Dow Jones Industrial Average settled at record high, after the news that the US, Canada and Mexico have reached a new free trade deal to replace the North American Free Trade Agreement (NAFTA). The lackluster performance on Wall Street came as traders seemed reluctant to make significant moves amid a quiet day on the US economic front. Also, lingering uncertainty about trade also kept some traders on the sidelines. Meanwhile, reports of the last-minute cancellation of US Defense Secretary Jim Mattis' trip to China have added to the concerns about rising tensions. Traders were cautious as Federal Reserve Chairman Jerome Powell delivered remarks at the annual meeting of the National Association for Business Economics in Boston. Powell acknowledged concerns about the outlook for inflation due to the low unemployment rate but said the Fed stands ready to act with authority if inflation expectations drift materially up or down. Powell said this historically rare pairing of steady, low inflation and very low unemployment is testament to the fact that they remain in extraordinary times. He added their ongoing policy of gradual interest rate normalization reflects their efforts to balance the inevitable risks that come with extraordinary times, so as to extend the current expansion, while maintaining maximum employment and low and stable inflation. Nasdaq declined 37.76 points or 0.47 percent to 7,999.55 and the S&P 500 fell 1.16 points or 0.04 percent to 2,923.43, while Dow Jones Industrial Average gained 122.73 points or 0.46 percent to 26,773.94.


After rallying near four-year high in previous session, crude oil futures ended lower on Tuesday as expectations of a rise in US stocks and the Organization of the Petroleum Exporting Countries' (OPEC's) increased production muted Monday's bullishness caused by supply concerns and a new trade deal between the US, Canada and Mexico. Besides, investors awaited weekly data, due early Wednesday, that are expected to reveal a second straight climb in US crude inventories. Benchmark crude oil futures for November declined 7 cents or less than 0.1 percent to settle at $75.23 a barrel on the New York Mercantile Exchange. December Brent crude was down by 18 cents or 0.2 percent to settle at $84.80 a barrel on London's Intercontinental Exchanged.


Indian rupee slumped to a fresh record closing low against the US dollar on Monday, on fresh bouts of dollar demand from importers. The sentiments were under pressure despite measures announced by the central bank to support the currency. The Reserve Bank of India (RBI) announced plans to purchase government bonds worth Rs 36,000 crore to boost liquidity in the system. Further, traders were cautious with India Meteorological Department (IMD) stating that at the end of the four-month-long monsoon season this year, the rainfall recorded in the country as a whole has remained 9 percent short of the normal mark. On the global front, US dollar strengthened against its most major opponents on Monday, as the US and Canada inked deal to reshape North American Free Trade Agreement, which gives US farmers more access to Canada's dairy market and shield Canada from the imposition of possible autos tariffs of the US. Finally, the rupee ended at 72.91, 42 paise weaker from its previous close of 72.49 on Friday.


The FIIs as per Monday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 7377.21 crore against gross selling of Rs 9075.84 crore, while in the debt segment, the gross purchase was of Rs 451.98 crore with gross sales of Rs 1121.20 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.97 crore against gross selling of Rs 1.41 crore.


The US markets ended mostly lower on Tuesday as investors shift focus to slowing growth prospects, US-China trade dispute, amid fading NAFTA deal sentiment. Asian markets were trading mixed on Wednesday following a volatile US session as investors weighed continuing concerns in Indonesia and Italy and strength in commodity prices. Late hour buying mainly helped the Indian markets to end near intra-day high level on Monday amid rise in India's manufacturing sector activity in September. Rally in banking and finance sector stocks also supported markets to recover from day's low. Today, the markets are likely to make positive start but there may be some cautiousness ahead of the Reserve Bank of India's monetary policy review later this week. Investors will be eyeing Services PMI data for the month of September to be out later in the day. Traders will be getting encouragement with the Commerce Ministry focusing on nine sectors, including pharma, food processing and textiles, to boost exports in the current fiscal. The ministry is targeting a minimum growth rate of 16% in exports this fiscal. Also, traders will be getting some support with report that the finance ministry expects the GST collections to cross Rs 1 lakh crore in November and December on account of festive season demand and the anti-evasion measures initiated by the revenue department. However, there will be some cautiousness with the government data showing that the growth of eight core sectors slowed to 4.2% in August, due to fall in output of crude oil, petroleum product and fertiliser. Besides, retail inflation for industrial workers rose to 5.61% in August from 2.52% in the year-ago month mainly due to rise in prices of food items and petroleum products. There will be some buzz in the power sector stocks with report that power tariff touched a decade high of Rs 18 per unit in the spot market on Tuesday due to low hydro and wind energy production and coal shortage at thermal plants. Also, there will be some reaction in steel sector stocks with report that the Centre will examine a proposal by the steel ministry to first merge the loss-making steel firm Neelachal Ispat Nigam (NINL) with Rashtriya Ispat Nigam (RINL) and then merge it with Steel Authority of India (SAIL) to create a single state-owned steel manufacturer to bring in efficiency.


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  • Bajaj Auto has registered a rise of 17% in total sales to 502,009 units in September 2018 against 428,752 units in September 2017. 
  • L&T's construction arm -- L&T Construction's Heavy Civil Infrastructure Business has won orders worth 7,489 crore.  
  • Coal India is eyeing for production target of 700 million tonne in fiscal 2019-20 in a bid of rising power demand. 
  • Tata Motors has registered an impressive growth of 20% in its domestic sales at 64,250 units in September 2018, as against 53,964 units over last year.   
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