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NSE Intra-day chart (21 June 2018)
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Market Commentary 22 June 2018
Markets to make pessimistic start on weak global cues

Indian equity benchmarks ended the choppy day with a cut of one third of a percent and frontline gauges settled below their crucial 10,750 (Nifty) and 35,500 (Sensex) levels, as traders looked ahead to the Bank of England and OPEC meetings for direction. Markets soon after positive start pared all of their gains to trade flat for most part of the day as traders remained on sidelines ahead outcome of the markets regulator SEBI's meeting where it will discuss proposed overhaul of governance norms for market infrastructure institutions as well as amendments to buyback and takeover norms. Other proposals, including reducing the cooling off period for former employees to one year and review of the watchdog's recruitment policy, are also on the agenda. Traders remained little concerned with former NASSCOM president R Chandrashekhar sounding a note of caution on the economy, saying it could bedisrupted if job growth was not constant. He said government statistics showed that nearly four million jobs in the formal sector were created from September 2017 to March 2018, of which about 50% were in the service sector. Investors took note of report stating that FII flows have seen a bumpy ride so far this year, with a meagre investment of $15 million, while domestic institutional investors (DIIs) continue to invest more aggressively into the Indian equity market and have bought net assets worth $7.9 billion. Losses remained capped with a private report stating that the credit growth in the micro, small and medium enterprises (MSME) sector is improving with the overall exposure reaching the highest level in over a year and impacts of demonetisation and the GST also seem to be subsiding. As per the report the overall credit exposure has shown the highest growth in last five quarters at Rs 54.20 trillion as of March 31, 2018, with MSMEs segment constituting Rs 12.6 trillion (23%) of the commercial credit outstanding. Meanwhile, India has hiked customs duty on several goods, including Bengal gram, lentils and artemia, imported from the US. The import duty hike would be effective from August 4. Finally, the BSE Sensex declined 114.94 points or 0.32% to 35,432.39, while the CNX Nifty was down by 30.95 points or 0.29% to 10,741.10.


The US markets ended lower on Thursday with the loss of over half percent on account of lingering concerns about the trade dispute between the US and China along with uncertainty about the outcome of this week's OPEC meeting. Saudi Arabia and Russia are reportedly pushing for an increase in oil production, with OPEC expected to announce its decision on output on Friday. Further, Sentiments were under presser as China's commerce ministry warned that US workers will be hurt by the country's capricious trade actions. Investors remain concerned with the Labor Department report showing a modest decrease in initial jobless claims in the week ended June 16th. The report said initial jobless claims dipped to 218,000, a decrease of 3,000 from the previous week's revised level of 221,000. Street had expected jobless claims to inch up to 220,000 from the 218,000 originally reported for the previous week. Meanwhile, the Conference Board released a report showing a slightly smaller than expected increase by its index of leading economic indicators in month of May. The Conference Board said its leading economic index edged up by 0.2 percent in May after climbing by 0.4 percent in April. Economists had expected the index to rise by 0.3 percent. Besides, the Philadelphia Fed's manufacturing index slowed sharply to a reading of 19.9 in June from 34.4 in May. Any reading above zero indicates improved conditions. The Dow Jones Industrial Average declined 196.10 points or 0.80 percent to 24461.70, the Nasdaq dropped by 68.56 points or 0.88 percent to 7712.95 and the S&P 500 was down by 17.56 points or 0.63 percent to 2749.76.


After rising in previous session, Crude oil futures ended lower on Thursday as OPEC and its allies appeared to move closer to a deal to raise output as key oil producers gathered in Vienna ahead of meetings on Friday and Saturday. Saudi Arabia and Russia - the world's largest oil producers - have pushed for an increase in production to be agreed at the meeting on Friday, and Iran in particular has been a vocal opponent of such plans. However, Iranian oil minister Bijan Zanganeh indicated that he would accept a modest rise in production, which is seen as paving the way for a joint agreement on lifting output. Benchmark crude oil futures for August delivery declined 17 cents or 0.3 percent to settle at $65.54 a barrel on the New York Mercantile Exchange. August Brent crude fell $1.69 or 2.3 percent at $73.05 a barrel on London's Intercontinental Exchange.


After making negative start, Indian rupee staged a comeback and ended higher against the US currency on selling of dollar by banks and exporters. Easing dollar pressures from importers and currency speculators in the midst of central bank intervention largely took the embattled currency higher. Traders looked ahead to the Bank of England and OPEC meetings for direction. Rupee sentiments were optimistic with a report showing that the government has cleared pending Goods and Service Tax (GST) refunds to the tune of Rs 38,062 crore of exporters as on June 16, 2018. On the global front, the dollar rose to a fresh 11-month high and the euro sagged towards its 2018 lows as investors increased their bets on a prolonged period of monetary policy divergence between the US and European central banks. Finally, the rupee ended at 67.99, 08 paise stronger from its previous close of 68.07 on Wednesday.


The FIIs as per Thursday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 3829.17 crore against gross selling of Rs 6202.89 crore, while in the debt segment, the gross purchase was of Rs 1233.37 crore with gross sales of Rs 2552.61 crore. Besides, in the hybrid segment, the gross buying was of Rs 23.21 crore against gross selling of Rs 3.09 crore.


The US markets ended mostly lower on Thursday, on lingering concerns about the trade dispute between the US and China along with uncertainty about the outcome of this week's OPEC meeting. Asian markets were trading mostly in red on Friday, amid concern global trade restrictions will curb growth. Indian equity benchmarks ended Thursday's session in red territory, as fears of a global trade war persisted and the Reserve Bank of India's June meeting minutes gave no indication of rate action going forward. Today, the start is likely to be in red, following weak global cues. Traders will be eyeing the Organization of the Petroleum Exporting Countries (OPEC) meet to be held later today to decide output policy. However, markets may get some support later in the day with Export Promotion Council for EoUs and SEZs (EPCES) data showing that exports from special economic zones (SEZs) grew by 38% in May to Rs 29,236 crore. It added that the major sectors contributing to the growth include biotech, chemicals, pharmaceuticals, computers, electronics, non-conventional energy, plastic, rubber, trading and services. Meanwhile, the Securities and Exchange Board of India (SEBI) has made major changes in rules governing fund-raising, to provide flexibility to issuers and to boost capital formation. The regulator tweaked norms governing stock exchanges, clearing corporations and depositories - known as market infrastructure institutions (MIIs) - capping the tenure of top officials and bringing in more accountability to the board structure. There will be some buzz in the banking stocks, with Financial Services Secretary Rajiv Kumar's statement that 180 day NPA norm for MSMEs will help reverse Rs 15,000 crore in the banking system as they have become standard asset. There will be some buzz in the Oil & Gas sector stocks, on report that India's crude oil production dropped 3% to just over 3 million tonnes in May on the back of dip in output from fields operated by state-owned Oil and Natural Gas Corp (ONGC).


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Reliance Industries






  • Cipla has received final approval for its ANDA for Testosterone Cypionate Injection 100mg/ml and 200mg/ml from the United States Food and Drug Administration USFDA. 
  • Bharti Airtel is planning to install 15,000 new mobile sites and over 3,000 km of optic fibre across Andhra Pradesh and Telangana for 2018-19. 
  • Maruti Suzuki India has maintained its leadership position in the domestic passenger vehicle (PV) market in the month of May with seven of its models featuring in the top 10 selling brands. 
  • Tech Mahindra has made strategic investments in US and Germany by setting up research and development center namely Makers Lab.
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