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NSE Intra-day chart (07 November 2017)
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Market Commentary 08 November 2017
Markets to make a cautious start tailing global cues

Tuesday turned out to be a dismal day of trade for Indian equity benchmarks, where key gauges went home with a cut of around a percent, breaching their crucial 33,400 (Sensex) and 10,400 (Nifty) levels. After making an optimistic start, markets failed to hold momentum and entered into red terrain with traders shifting focus on corporate earnings and developments related to PSUs. Sentiments remained dampened with oil prices hitting their highest since July 2015 on Monday as Saudi Arabia's crown prince cemented his power over the weekend through an anti-corruption crackdown. Traders also remained concerned with a foreign brokerage which reported that a year after the Indian government scrapped high denomination currency notes, a wide range of indicators suggest the economy is still coming to terms with the move. The report highlighted that while the initial scenes of long queues of people exchanging notes disappeared within a month or so, the shock measure left a rather lasting impact on informal economic activities, bank deposits and digital transactions. It added that in an economy where 90 percent of employment and over 50 percent of Gross Domestic Product (GDP) is derived from informal activities, this is bound to be a highly disruptive process. Markets extended its southward journey in second half of the trade to end near intraday lows. Traders failed to get any sense of relief with Finance Minister Arun Jaitley's statement that excessive cash in the economy has 'its own cost' and India is gradually moving towards digital transactions. Investors paid no heed to the BMI Research's latest report that the ongoing economic reforms and improvements to the business environment will continue to support India's economic growth over the coming years, and they expect the country to be one of the best performing emerging market economies, with real GDP growth set to average 6.5 percent over the next five fiscal years. Finally, the BSE Sensex declined 360.43 points or 1.07% to 33,370.76, while the CNX Nifty was down by 101.65 points or 0.97% to 10,350.15.


The US markets closed mostly lower on Tuesday, though the Dow industrials eked out a modest gain to end in record territory. The broader market was weighed down by a selloff in financials, consumer discretionary and small-cap stocks amid concerns over the timing and ultimate shape of tax legislation working its way through Congress. Congressional Republican unveiled a long-awaited plan last week, though it was unclear when the policy could be enacted, what form it might take, or even whether it was likely to pass at all. On the economy front, the number of job openings in the US rose slightly in September to 6.09 million, keeping them near a record high. Job openings have topped 6 million for four months in a row for the first time ever. Some 5.27 million people were hired, down from 5.42 million. And 5.24 million people lost their jobs, also down from the prior month. The so-called quits rate among private-sector employees was unchanged at 2.4%. The quit rate edged up to 2.2% from 2.1% if government workers are included. The Nasdaq dropped 18.65 points or 0.27 percent to 6,767.78, the S&P 500 edged lower by 0.49 points or 0.02 percent to 2,590.64, while the Dow Jones Industrial Average added 8.81 points or 0.04 percent to 23,557.23. 


Crude oil futures cooled a bit on Tuesday ahead of the inventory data and after Opec said it expected a surge in North American shale output to cap demand for the cartel's crude oil. Opec in its 2017 World Oil Outlook revised upwards North American shale oil to 5.1 million barrels per day (bpd) from 4.1 million bpd, citing the recent rally in crude prices as one of the catalysts to drive up shale output. The U.S. Energy Information Agency in separate report also revised upwards its estimate for domestic crude oil production. Benchmark crude oil futures for December delivery ended lower by $0.15 or 0.3 percent at $ 57.20 a barrel on the New York Mercantile Exchange. Brent crude for January delivery was down by 57 cents to $63.71 a barrel on the ICE.


Caught in a downward spiral for the second straight session, Indian rupee ended considerably weaker against the US dollar on Tuesday, on increased selling of the US currency by exporters and banks. Besides, the fall in the rupee was also triggered by dollar's appreciation overseas against a basket of major currencies along with extremely bearish local equity markets. Traders even overlooked BMI Research's latest report that the ongoing economic reforms and improvements to the business environment will continue to support India's economic growth over the coming years, and they expect the country to be one of the best performing emerging market economies, with real GDP growth set to average 6.5 percent over the next five fiscal years. On the global front, dollar pushed higher against a basket of the other major currencies on Tuesday as investors continued to monitor the progress of the US tax bill, while the euro fell to the lowest level in three months. Finally, the rupee ended at 65.03, 35 paise weaker from its previous close of 64.68 on Monday.


The FIIs as per Tuesday'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 5141.15 crore against gross selling of Rs 4403.05 crore, while in the debt segment, the gross purchase was of Rs 782.70 crore with gross sales of Rs 1332.75 crore.


The US markets made a mixed closing in the last session after a lackluster day of trade. The major averages pulled back into negative territory after reaching record intraday highs in early trading, as traders cashed in on some of the recent strength in the markets. The Asian markets have made a similar start to the overnight closing of the US markets and some of the indices are in red amid concern about the progress of U.S. tax reforms, after a report that Senate Republican leaders are considering a delay in the implementation of a corporate-tax cut. The Indian markets suffered a sharp sell-off in the last session amid concerns that rising oil prices may lift inflation and hit economic growth. Today, the start is likely to remain cautious on sluggish global cues. Traders may however get some support with report that net direct tax collections rose by 15.2 per cent to Rs. 4.39 lakh crore between April and October this fiscal. This amounts to 44.8 per cent of the total Budget estimate of direct taxes of Rs. 9.8 lakh crore for 2017-18. Also, Arvind Panagariya, observing that the recent increase in India's ease of doing business ranking by the World Bank was long overdue, has said the country as a place for business is a lot more attractive than its ranking suggests. In a other boost to the markets, private equity (PE) and venture capital (VC) investments in India touched a new high of $21.8 billion in 2017 till date (January-October), surpassing the previous record of $19.6 billion in 2015. Meanwhile, the Insolvency and Bankruptcy Board of India (IBBI) - the insolvency regulator - has tightened the due diligence framework on resolution applicants, including promoters. Further, the IBBI has also imposed greater responsibility on the resolution professional and Committee of Creditors in discharging their duties. There will be lots of important earnings announcements to keep the markets buzzing.


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Tata Motors





  • Tata Steel has set up the country's largest Coke Dry Quenching facility capable of handling 200 MT of the hot fuel per hour at its greenfield Kalinganagar steel plant in Odisha.
  • Lupin has received a warning letter issued by the USFDA on November 6, 2017, for its formulation manufacturing facilities at Goa and Indore.
  • Maruti Suzuki India has launched the ‘Royal Platinum Extended Warranty Programme' for extended assurance to its customers.
  • Tata Motors' subsidiary -- Jaguar Land Rover has reported total retail sales of 46,418 vehicles in October, up 0.2% on October 2016.
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