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NSE Intra-day chart (05 September 2018)
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Market Commentary 06 September 2018
Markets likely to make a positive start


Extending southward journey for third straight session, Indian equity benchmarks ended the sluggish day of trade with a cut of over one third of a percent with frontline gauges breaching their crucial 11,500 (Nifty) and 38,100 (Sensex) levels. Soon after making a cautious start, markets started moving southward as sentiments remain dampened with report that the National Council of Applied Economic Research's (NCAER) business confidence index (N-BCI) fell by 12.9% in July over April this year on a quarter-on-quarter basis on account of worsening of business sentiments across various segments. NCAER said the decline in the N-BCI on a year-on-year basis works out to be 15.9%. Some cautiousness also crept in with a private report that India's growth rate is expected to moderate this fiscal despite a strong start in the April-June quarter largely owing to tighter financial conditions, limited fiscal headroom and upcoming elections. Adding to the pessimism, the National Stock Exchange (NSE) raised concern over potential for large-scale cyber-attacks on financial market infrastructure and called for setting up the standards to bring about the change through talent empowerment and investment in innovation. Markets extended southward journey and domestic bourses even went to test psychological 37,800 (Sensex) and 11,400 (Nifty) levels after India's services sector activity fell in the month of August from July's 21-month peak, primarily due to the weakest growth in new work. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index dropped to 51.5 in August from 54.2 in July, signaling the slowest growth in the current sequence. Besides, the Nikkei India Composite PMI Output Index which measures both manufacturing and services too fell to 51.9 in August from 54.1 in July. However, the key gauges got some support near those intraday low levels as they managed to trim some of their losses to end off day's lows, as traders took some solace with Commerce and Industry Minister Suresh Prabhu's statement that the proposed new industrial policy, to be released soon, would help link domestic industry with the global supply chain. Finally, the BSE Sensex declined by 139.61 points or 0.37% to 38,018.31, while the CNX Nifty was down by 43.35 points or 0.38% to 11,476.95.


Following the modest weakness seen in the last session, the US markets ended mostly lower on Wednesday as investors braced for another round of trade negotiations between the US and Canada. Canadian Prime Minister Justin Trudeau has indicated Canada will not bend on key demands regarding NAFTA in talks with the US this week. Trudeau added there are a number of things they absolutely must see in a renegotiated NAFTA.  Besides, a sharp sell-off in tech pushed the Nasdaq Composite and S&P 500 lower. The weakness in tech stocks came as Facebook Inc. and Twitter Inc. executives testified on Capitol Hill about online misinformation. Further, there was some cautiousness in the markets on reports that President Donald Trump intends to impose tariffs on another $200 billion worth of Chinese imports as soon as a public comment period ends on Thursday may also generate selling pressure. On the economic front, the Commerce Department released a report showing the US trade deficit widened in the month of July. The Commerce Department said the trade deficit widened to $50.1 billion in July from a revised $45.7 billion in June. Street had expected the deficit to widen to $50.1 billion from the $46.3 billion originally reported for the previous month. The S&P 500 declined 8.12 points or 0.28 percent to 2888.60 and Nasdaq slipped 96.07 points or 1.19 percent to 7995.17, while Dow Jones Industrial Average gained 22.51 points or 0.09 percent to 25974.99.


Crude oil futures ended at their lowest levels in about a week on Wednesday as a major storm that passed through the Gulf of Mexico missed the bulk of the oil and natural-gas operations in the region. Gordon largely turned out to be a non-event for the energy market, and if anything, the sell-the-news aspect of the tropics trade has triggered a profit-taking pullback across the space. However, prices have been bolstered in recent weeks and are likely to remain supported amid signs that Iranian crude exports are declining at a faster rate than expected, in the run up to November when US sanctions on the country's oil industry take effect. Benchmark crude oil futures for October dropped $1.15 or 1.7 percent to settle at $68.72 a barrel on the New York Mercantile Exchange. November Brent crude declined 90 cents or 1.2% to settle at $77.27 a barrel on London's Intercontinental Exchanged.


Continuing its free fall for the sixth straight session, Indian rupee settled at a fresh record closing low against dollar on Wednesday, hurt by fresh demand for the American currency from importers. Sentiments remain dampened with a private report that India's growth rate is expected to moderate this fiscal despite a strong start in the April-June quarter largely owing to tighter financial conditions, limited fiscal headroom and upcoming elections. Some cautiousness also crept in on report that India's services sector activity fell in August from July's 21-month peak as new business orders declined, following which firms raised their staffing levels at a modest pace amid rising input cost inflation. The Nikkei/IHS Markit Services Purchasing Managers' Index declined to 51.5 in August from a 21-month high of 54.2 in July. On the global front, dollar rose broadly on Wednesday as concerns grew that US President Donald Trump may soon ramp up a trade war with Beijing by imposing tariffs on more Chinese imports. Finally, the rupee ended at 71.78, 21 paise weaker from its previous close of 71.57 on Tuesday.


The FIIs as per Wednesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 5976.21 crore against gross selling of Rs 4357.45 crore, while in the debt segment, the gross purchase was of Rs 935.89 crore with gross sales of Rs 2634.55 crore. Besides, in the hybrid segment, there was no gross buying and gross selling.


The US markets ended mostly lower on Wednesday as trade tensions resurfaced ahead of more talks between the United States and Canada on revamping the North American Free Trade Agreement. Asian markets were trading mostly in red on Thursday amid ongoing concerns about emerging-markets. The Indian markets ended lower on Wednesday, with Nifty settling below 11,500 mark, as investor sentiment remained bearish amid a plunging rupee and weak global cues. Moreover, India's August services sector activity fell from the 21-month high to 51.5 in August also dampened the sentiments. Today, the markets are likely to open in green after three sessions of losses as oil extended overnight losses on expectations of weaker demand from China and other emerging markets. Traders will be getting some support with Finance Minister Arun Jaitley's statement that there is no need to worry over the steep fall in the Indian rupee's value against the US dollar as the inherent strength of the country's economy will aid in arresting the downtrend. Also, easing compliance burden for businesses, the Finance Ministry said that Goods and Services Tax (GST) refunds can be claimed by simply submitting a printout of GSTR-2A form to tax authorities instead of giving all purchase invoices of a month. Traders may take note of The Securities and Exchange Board of India's (SEBI) statement that it would review an order tightening rules on foreign funds ownership by entities of Indian origin, after some fund managers said it could lead to massive dollar outflows. There will be some buzz in the steel sector stocks with ICRA's report that sharp depreciation in the rupee is likely to help the domestic steel industry lower imports and boost exports in the coming months, which in turn may improve the country's overall steel trade balance. Also, there will be some reaction in sugar sector stocks as facing an unprecedented crisis of surplus production, the Indian sugar industry demanded the government hike the minimum sale price (MSP) of sugar to Rs 36 a kilo (kg), from the current Rs 29 and mandatorily fix a quota of export of 7 million tonnes (MT) for the 2018-19 season that starts from October.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Hindalco Industries






  • Bharti Airtel will offer new prepaid recharge coupons of Rs 35, Rs 65 and Rs 95.  
  • Vedanta is optimistic about completion of its refinery expansion project, encouraged by supply of bauxite from the state-owned Odisha Mining Corporation. 
  • Maruti Suzuki India called for a clear and stable policy framework to enable the automobile industry to prepare for future mobility. 
  • Tech Mahindra has partnered with FutureSkills to train its workforce in next-gen technologies.
News Analysis