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NSE Intra-day chart (28 May 2018)
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Market Commentary 29 May 2018
Markets likely to make cautious start on feeble Asian cues

 

Extending their northward journey for third straight session, Indian equity benchmarks ended the Monday's trade in green terrain with frontline gauges recapturing their crucial 35,100 (Sensex) and 10,650 (Nifty) levels, as oil extended a steep decline in the previous session, helping ease recent fears over inflation, current account and fiscal deficits. Markets started the session on an optimistic note with traders taking encouragement with Industry chamber CII's statement that businesses across several key sectors are seeing firm growth in sales and orders, indicating that the economy is on a recovery path and investments will pick up. CII said the impact of sustained structural reforms is now being felt on the ground as a mammoth economy is turning around. Some support also came with CARE Ratings' report stating the country's industrial output is expected to log five to six per cent growth in this fiscal, bettering 4.3% growth rate clocked in the previous fiscal. Adding to the optimism, a private report said India's economy may have expanded by 7.1-7.5% in the January-March quarter - driven by manufacturing and construction - compared with 7.2% in the third quarter. Meanwhile, the finance ministry is planning to set up a fund under the National Investment and Infrastructure Fund (NIIF) dedicated for strategic investments. Local bourses added some more gains in second half on report stating that India is in a good position to deal with any fallout from global trade tensions and with right policies can reach an 8%-plus growth rate and hold it. The report also said that India's services sector exports remain globally competitive and have a huge potential. Investors also took note of Commerce and Industry Minister Suresh Prabhu's statement that India has a huge potential to boost trade and investments with Russia. Some support also came with Finance Minister Arun Jaitley's statement that India has transformed from being a part of the fragile five to the bright spot on the global economic stage. He added that the government will now focus on consolidation of the initiatives taken in the past. Finally, the BSE Sensex rose 240.61 points or 0.69% to 35,165.48, while the CNX Nifty was up by 83.50 points or 0.79% to 10,688.65.

 

The US markets remained closed on Monday on account of Memorial Day holiday.

 

Extending losing streak for the fifth straight session, crude oil futures slumped once again on Monday, as investors remained nervous about the prospect of major oil producers such as Russia and Saudi Arabia boosting production, and as U.S. output also showed signs of picking up. Beyond the prospect of those part of the production-cap deal led by the Organization of the Petroleum Exporting Countries (OPEC) agreeing to higher output, was Friday afternoon's disclosure that active U.S. oil-drilling rigs rose by the most since February the past week. Benchmark crude oil futures for July delivery fell $1.18 or 1.8 percent to settle at $66.69 a barrel on the New York Mercantile Exchange. July Brent crude slipped $1.10 or 1.4 percent to settle at $75.35 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended at two-week high against US dollar on Monday taking its winning streak for third straight session, after crude oil prices posted its biggest drop in about a year and the US-Korea summit appears to be back on track. Traders took encouragement with CARE Ratings' report stating the country's industrial output is expected to log five to six per cent growth in this fiscal, bettering 4.3 per cent growth rate clocked in the previous fiscal. Adding some optimism among the investors, Finance Minister Arun Jaitley said that India has transformed from being a part of the fragile five to the bright spot on the global economic stage. He added that the government will now focus on consolidation of the initiatives taken in the past. On the global front, dollar index ended higher against some of its rivals as investors awaited Federal Reserve Bank of St. Louis President James's speech scheduled on Tuesday and the U.S. Non-Farm Payrolls due on Friday. Finally, the rupee ended at 67.42, 35 paise stronger from its previous close of 67.77 on Friday.

 

The FIIs as per Monday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 3279.77 crore against gross selling of Rs 5326.97 crore, while in the debt segment, the gross purchase was of Rs 1015.77 crore with gross sales of Rs 1066.05 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.39 crore against gross selling of Rs 0.90 crore.

 

The US markets remained closed on Monday on account of Memorial Day holiday. Asian markets were trading mostly in red in early deals on Tuesday, on the back of slide in oil prices. Political turmoil in Italy weighed on sentiment, resulting in a more than 2 percent fall overnight for Italian stocks. Indian equity benchmarks edged higher for the third straight session on Monday as geopolitical worries abated and a steep drop in oil prices helped ease investor worries over inflation and twin deficits. Today, the markets are likely to make a cautious start as traders may opt to pare their profit after three sessions of gains amid weak Asian cues. Traders will get some support later in the day with Economic Affairs Secretary Subhash Chandra Garg's statement that the Indian economy is expected to grow between 7.3 to 7.5 percent in the March quarter. The government will release GDP data on Thursday. He said the country was expected to grow at 6.7 percent in the 2017/18 financial year that ended in March. Some support may also come with External Affairs Minister Sushma Swaraj's statement that her ministry's economic diplomacy attracted $209.83 billion for India's flagship development programmes. She also said that the External Affairs Ministry also created two new divisions for this - Department of Economic Diplomacy and Department of States - and merged both of them. Some optimism will also be there with the India Meteorological Department (IMD) forecasting that the Monsoon would hit Kerala in the next 24 hours. It said that the southwest Monsoon had advanced into South Andaman Sea, some parts of South Bay of Bengal and Nicobar Islands on May 25, with enhanced cloudiness and rainfall. Meanwhile, Oil Minister Dharmendra Pradhan has said that the government is planning a holistic strategy to find long-term solution to spike in petrol and diesel prices triggered by a spurt in international rates.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10,688.65

10,649.53

10,718.78

BSE Sensex

35,165.48

35,034.33

35,268.79

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Indian Oil

237.86

170.45

167.50

175.20

ICICI Bank

190.63

299.25

294.30

303.25

SBI

189.59

272.05

267.33

275.48

Sun Pharma

160.08

499.70

484.82

509.77

Hindustan Petroleum

119.90

313.10

307.93

316.83

 

  • L&T's construction arm - L&T Construction's Water & Effluent Treatment Business has bagged orders worth Rs 5,704 crore.  
  • Power Grid has tied up with EEF to offer digital solutions at Army-run schools in Jammu and Kashmir. 
  • TCS has increased its spending on R&D and innovation initiatives by over 17 percent to Rs 15 billion in 2017-18, compared to the previous year. 
  • Sun Pharma has reported a rise of 6.97% in its consolidated net profit at Rs 1308.96 crore for Q4FY18 as compared to Rs 1223.71 crore for Q4FY17.
News Analysis