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NSE Intra-day chart (09 May 2018)
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Market Commentary 10 May 2018
Markets likely to start slightly in green


Extending winning streak for third straight day, Indian equity benchmarks ended the Wednesday's trade with a gain of over quarter a percent. Markets started the session on pessimistic note with report that India slipped to the 6th position globally in the business optimism index for the first quarter of this year. Business optimism is however at an all-time high globally with the index at net 61%, the highest figure recorded in 15 years of research. Sentiments also remained dampened with a private report stating that India missed out on a synchronized global recovery in 2017 even as the economy recovers from the structural shocks of Goods and Services Tax (GST) and demonetization. Some cautiousness also prevailed on a survey showing that touching a four-year low, optimism level among Chief Financial Officers about the country's financial and macro-economic conditions for the second quarter of this year has declined nearly 18%. The composite CFO Optimism Index declined 17.8%, on a quarter-on-quarter basis, to 96.2 for the second quarter of 2018. However, markets gained momentum and entered into green terrain with traders turning optimistic on International Monetary Fund's (IMF) report reaffirming that India will be the fastest growing major economy in 2018, with a growth rate of 7.4% that rises to 7.8% in 2019 with medium-term prospects remaining positive. The IMF's Asia and Pacific Regional Economic Outlook report said that India was recovering from the effects of demonetization and the introduction of the GST and the recovery is expected to be underpinned by a rebound from transitory shocks as well as robust private consumption. Sentiment on the street remained positive with a report stating that India's economy is forecast to grow at 7.2% in 2018 and private investment in India is expected to revive as the corporate sector adjusts to GST, infrastructure spending increases and corporate and bank balance sheets improve with government support. Finally, the BSE Sensex surged 103.03 points or 0.29% to 35,319.35, while the CNX Nifty was up by 23.90 points or 0.22% to 10,741.70.


The US markets closed higher on Wednesday, with the Dow booking its fifth gain in a row and the broader stock market rallied as sharp gains in energy, financials and technology stocks propelled the main benchmarks firmly higher. Energy-related stocks scored a lift after President Donald Trump's decision a day earlier to pull the US out of the Iran nuclear deal and resume sanctions against the oil-producing nation prompted investors to bet on higher prices ahead for the commodity. Separately, Atlanta Fed President Raphael Bostic said that uncertainty over President Donald Trump's trade policies is the most obvious risk facing the US economy and may be prompting businesses to hold back on investment. Bostic said conversations with business officials in his southern district have raised the possibility that delayed investment because of trade risks may undercut the hoped-for effect of the recent corporate tax cuts. Stronger economic growth anticipated from those tax reductions was premised in part on higher business investment. On the economy front, wholesale prices rose a scant 0.1% in April to mark the smallest gain since the end of 2017, perhaps a sign inflationary pressures are leveling off after a prolonged upsurge. The 12-month rate of wholesale inflation slipped to 2.6% from 3%. The March reading was the highest the government has recorded since it reformulated the PPI in 2013. The so-called core rate of wholesale inflation also increased 0.1%. The core rate is a closely watched category that excludes food, energy and retail-trade margins. The yearly rate of core inflation slipped to 2.5% from 2.9%. The Dow Jones Industrial Average added 182.33 points or 0.75 percent to 24,542.54, the Nasdaq gained 73.003 points or 1.00 percent to 7,339.90, and the S&P 500 was up by 25.87 points or 0.97 percent to 2,697.79.


Extending rally for yet another day, Crude oil futures edged higher on Wednesday, hitting three and a half year high, buoyed by expectations that the U.S. decision to pull out of the Iran nuclear deal and re-impose sanctions will disrupt the flow of crude in the Middle East. The rally was also supported after a government report released on Wednesday revealed the first decline in U.S. crude supplies in three weeks. The Energy Information Administration (EIA) reported a draw of 2.2 million barrels in U.S. crude oil inventories. That is a much bigger drop in inventories than expected. Gasoline inventories also fell more than 2 million barrels. Benchmark crude oil futures for June delivery jumped by $2.08 or 3 percent to settle at $71.14 a barrel on the New York Mercantile Exchange. July Brent crude gained $2.36 or 3.2 percent to settle at $77.21 a barrel on London's Intercontinental Exchange.


Indian rupee weakened on Wednesday due to fresh demand for American currency from banks and importers. Traders remained concerned with report that India slipped to the 6th position globally in the business optimism index for the first quarter of this year. The business sentiment in India has been the weakest since 2014 in the first quarter, the report also stated that the confidence has been shaken since the third quarter of 2017 with weakening currency and a surge in oil prices. Some anxiety also spread among the investors with a survey showing that touching a four-year low, optimism level among Chief Financial Officers about the country's financial and macro-economic conditions for the second quarter of this year has declined nearly 18%. The composite CFO Optimism Index declined 17.8%, on a quarter-on-quarter basis, to 96.2 for the second quarter of 2018. On the global front, dollar strengthened against major global currencies overseas as crude oil prices zoomed past $76 per barrel level and pushed Treasury yields higher after US President Donald Trump pulled out from the international nuclear deal with Iran. Finally, the rupee ended at 67.27, 19 paise weaker from its previous close of 67.08 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 5955.05 crore against gross selling of Rs 5591.44 crore, while in the debt segment, the gross purchase was of Rs 3130.93 crore with gross sales of Rs 5120.80 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.64 crore against gross selling of Rs 0.93 crore.


The US markets ended in green on Wednesday partly due to a sharp increase by the price of crude oil following President Donald Trump's decision to withdraw from the Iran nuclear deal. Asian stocks markets were trading mostly higher on Thursday, with energy shares leading the way as crude oil prices bolted higher. Indian markets eked out modest gains on Wednesday as investors remained hopeful that the Iran nuclear deal will remain partially intact, even without the United States. Today, the markets are likely to make flat-to-positive start. Traders will get some support with India Ratings' report that the Indian economy is gradually coming out of the twin shock of demonetisation and GST which temporarily derailed growth. The ratings agency, however, cautioned on the possible widening of the current account deficit (CAD) due to rising oil prices which was creating pressure on the currency. However, there will be some concern with Assocham's statement that President Donald Trump's announcement of the US pulling out from the Iran deal and his decision to re-impose sanctions on the key crude oil producer will exert pressure on fuel prices and affect the Indian economy on the downside. Meanwhile, a private report stated that the income-tax returns filed for financial year 2017-18 has dipped by over 60 per cent in April 2018, but neither the IT Department nor the Centre is unduly worried. Stocks related to insurance sector will be in focus on report that the government is considering allowing 100 per cent foreign direct investment (FDI) in insurance intermediaries with a view to give a boost to the sector and attracting more funds. There will be some important earnings announcements too, to keep the markets buzzing


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  • Maruti Suzuki India has rolled out a service campaign to inspect 52,686 units of the new Swift and Baleno for a possible fault in the brake vacuum hose. 
  • Tata Steel has launched -- Aashiyana -- a web portal to meet the varied needs of individual home building customers. 
  • Tata Motors' subsidiary -- JLR has reported total retail sales of 45,180 vehicles in April 2018, up 11.9% year-on-year. 
  • Yes Bank has launched -- From Rural Cluster to Urban Market -- a cluster development program in Barmer, Rajasthan.
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