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NSE Intra-day chart (23 May 2018)
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Market Commentary 24 May 2018
Markets to start marginally in green on Thursday


Wednesday turned-out to be a disappointing day of trade for Indian equity benchmarks, with frontline gauges ending below their crucial 34,400 (Sensex) and 10,450 (Nifty) levels, on the back of high fuel prices and weakness in rupee. Markets started the session on pessimistic note as sentiments remained downbeat on report that fuel prices hit a fresh record high on Tuesday as petrol prices rose 30 paise to Rs 84.70 per litre in Mumbai. Similarly, diesel prices rose 27 paise to Rs 72.48 per litre in Mumbai. Anxiety spread among investors as former Union Finance Minister P Chidambaram criticised the Centre for the fuel price hike and claimed that the rate can be reduced by Rs 25 per litre but the government is not doing it. Traders paid no heed towards Employment Provident Fund Organisation's (EPFO) latest Overall Payroll Data report showing that India created 39.36 lakh new jobs in seven months period till March 2018. As per the report, total 6,13,134 new payrolls were created during March 2018 as against 5,89,034 created in the previous month, registering a growth of 4.09%. Selling got intensified in second half of the trade after rupee touched fresh 16-month low of 68.29 against US Dollar. The market participants overlooked report that the agriculture ministry released the Model Contract Farming Act, 2018, which lays emphasis on protecting the interests of farmers, considering them as weaker of the two parties entering into a contract. Traders shrugged off private report that an open data ecosystem will impact India's GDP by $22 billion, or the equivalent of two times the amount raised through the sale of 4G spectrum in 2017. The report claims that an open data ecosystem has the power to double farmers' income by 2022, provide Universal Health coverage and provide microloans to three million plus micro, small and medium enterprises among other benefits. Finally, the BSE Sensex declined 306.33 points or 0.88% to 34,344.91, while the CNX Nifty was down by 106.35 points or 1.01% to 10,430.35.


The US markets ended higher on Wednesday after the minutes from the Federal Reserve's May 2 meeting confirmed that policy makers support a June rate increase and are maintaining a calm attitude about the inflation outlook. The markets started the session in red terrain and remained under pressure in early deals as geopolitical and trade concerns continued to dent investor sentiment. However, Markets rebounded modestly as Fed minutes appeared to have reassured investors that the central bank will not be too aggressive with raising interest rates. The probability of three more rate hikes by the end of this year instead of two slipped immediately after the minutes. According to CME's FedWatch tool, Fed funds futures market is pricing in less than a 40% chance of a fourth rate hike in 2018. On the economic front, the Commerce Department released a report showing a pullback in new home sales in the month of April. The report said new home sales fell by 1.5 percent to an annual rate of 662,000 in April after jumping by 2 percent to a revised rate of 672,000 in March. The street had expected new home sales to drop to a rate of 679,000 from the 694,000 originally reported for the previous month. The Dow Jones Industrial Average surged 52.40 points or 0.21 percent to 24886.81, the S&P 500 jumped 8.85 points or 0.32 percent to 2,733.29 and the Nasdaq was up by 47.50 points or 0.64% to 7,425.96.


Crude oil futures settled lower for second straight day on Wednesday on the back of unexpected jump in weekly US crude supplies. According to data from the Energy Information Administration (EIA), inventories of US crude rose by 5.778 million barrels for the week ended May 18, confounding expectations for a draw of 1.567 million barrels. Besides, traders also remained cautions with report that the OPEC may decide to boost output to make up for a Venezuelan production shortfall and potential lost supply from Iran. However, Brent crude future managed to end with modest gains for second straight session. Benchmark crude oil futures for July delivery slipped 36 cents or 0.50 percent to settle at $71.84 a barrel on the New York Mercantile Exchange. July Brent crude was up by 23 cents or 0.30 percent to settle at $79.80 a barrel on London's Intercontinental Exchange.


Indian rupee depreciated to near seventeen-month low against dollar on Wednesday, following continued outflows by foreign investors from the local equity and bond markets amid surging crude oil prices. Traders failed to get relief with the private report that an open data ecosystem will impact India's GDP by $22 billion, or the equivalent of two times the amount raised through the sale of 4G spectrum in 2017. The report claims that an open data ecosystem has the power to double farmers' income by 2022, provide Universal Health coverage and provide microloans to three million plus micro, small and medium enterprises among other benefits. On the global front, dollar climbed against most of its rivals on Wednesday, but lost ground against the yen as geopolitical worries spurred buying in Japan's haven currency. Finally, the rupee ended at 68.41, 37 paise weaker from its previous close of 68.04 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 3310.96 crore against gross selling of Rs 4738.53 crore, while in the debt segment, the gross purchase was of Rs 42.15 crore with gross sales of Rs 1214.06 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.18 crore against gross selling of Rs 2.48 crore.


The US markets ended higher on Wednesday, following the release of the minutes of the latest Federal Reserve meeting. Asian markets are trading mostly in red on Thursday as investors fretted about new setbacks in US-China trade talks, however losses remained capped as negative sentiment was tempered by US Federal Reserve meeting minutes suggesting it would not raise the tempo at which it increases interest rates. Indian equity benchmarks edged lower on Wednesday amid continued selling by foreign funds as oil stayed at multi-year peaks and the rupee traded near 17-month low against the dollar. Today, the markets are likely to start slightly in green with dovish Fed minutes as well as a drop in crude oil prices likely to offer some support after recent heavy losses. Traders will get some support with report that India's direct tax collections for the last financial year crossed the Rs 10 lakh crore mark, registering an increase of 18 per cent over the previous fiscal. Some support will also come with report that India has moved one notch higher, to the 44th place in terms of competitiveness, in the annual rankings compiled by International Institute for Management Development (IMD) which placed the US in the top slot. The US became the most competitive economy globally driven by its strength in economic performance and infrastructure, followed by Hong Kong and Singapore in the second and third place, respectively. Traders will also react to union minister Ravi Shankar Prasad's statement that the government is working on a long-term solution to fuel prices. Meanwhile, the government has cleared amendments to the Insolvency and Bankruptcy Code (IBC), incorporating changes suggested by a government-appointed panel.


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



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Tata Motors





Tata Steel 





Hindustan Petroleum






  • Tata Steel will raise funds worth Rs 16,500 crore through debt instruments to fund Rs 32,500 crore acquisition of Bhushan Steel. 
  • Cipla has reported net profit of Rs 178.61 crore for Q4FY18 as compared to net loss of Rs 61.79 crore for Q4FY17. 
  • Yes Bank has recovered an amount of Rs 184 crore, against an original claim filed for Rs 325 crore, pursuant to the sale of Bhushan Steel to Tata Steel. 
  • L&T's construction arm -- L&T Construction's Transportation Infrastructure business has bagged an order worth Rs 1,425 crore.
News Analysis