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NSE Intra-day chart (28 September 2018)
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Market Commentary 01 October 2018
Markets to make cautious start amid mixed Asian cues


Extending southward journey for third straight session, Indian equity benchmarks ended the first day of new F&O expiry on pessimistic note, as traders remained on sidelines ahead of the Goods and Services Tax (GST) Council's 30th meeting to be held on Friday to discuss multiple proposals for levying additional cess to help flood-ravaged Kerala recoup revenue losses. After making a cautious start, key indices gained traction and trade in fine fettle in noon deals as traders took some relief with CRISIL Research's report that revenues of corporates are expected to log a robust 12.1% year-on-year growth in the second quarter of FY 2019, nearly twice the 6.4% growth in the corresponding quarter of last fiscal. Traders also took some comfort with a report that the Commerce Ministry removed the value limit for exports through post but has fixed Rs 5 lakh cap in case of overseas shipments through courier services. Exporters' body FIEO said the move gives an edge to shipments through foreign post offices over couriers. Besides, a private report state that Indian agriculture could be heading for bumper kharif crop harvest, that it could provide a major fillip to rice exports. However, markets took U-turn and entered into red terrain in last leg of trade as sentiments turned pessimistic with SBI Ecowrap report stating that the Reserve Bank of India (RBI) is expected to hike its key lending rate by 25 basis points in October. According to the report, the expected rate hike might not be the last one in the current financial year. Adding some concerns, the World Trade Organization (WTO) said that escalating trade tensions and tighter credit market conditions in important markets would moderate the growth of global merchandise trade to 3.7% in 2019 from 3.9% in 2018. The multilateral trade body also said that trade volume growth should slow to 3.7% in 2019 as global GDP growth dips to 2.9%. Markets pared most of their losses in dying hour of trade, but it was not enough to bring key gauges back into green terrain. Finally, the BSE Sensex declined 97.03 points or 0.27% to 36,227.14, while the CNX Nifty was down by 47.10 points or 0.43% to 10,930.45.


The US markets ended mostly higher on Friday with marginal gains as uncertainty about trade contributed to the lackluster performance on Wall Street as the US and Canada approach a September 30 deadline to reach an agreement for Canada to join a trade deal struck between the US and Mexico. US Trade Representative Robert Lighthizer recently said the U.S. is prepared to move ahead with the deal replacing the North American Free Trade Agreement without Canada. Traders also eyeing developments overseas after the new Italian government offered a budget with a deficit target three times larger than the previous administration's goal. On the economic front, the Commerce Department's report showed that personal income rose by slightly less than expected in the month of August, while personal spending increased in line with street estimates. The report said personal income climbed by 0.3% in August, matching the increase seen in July. Meanwhile, the Commerce Department said personal spending rose by 0.3% in August after climbing by 0.4% in the previous month. Besides, a separate report from the University of Michigan showed consumer sentiment improved by slightly less than initially estimated in the month of September. The report said the consumer sentiment index for September was downwardly revised to 100.1 from the preliminary reading of 100.8. Dow Jones Industrial Average gained 18.38 points or 0.07 percent to 26,458.31 and Nasdaq advanced 4.39 points or 0.05 percent to 8,046.35, while the S&P 500 was down by 0.02 points to 2,913.98.


Crude oil futures extended their gains for second straight session on Friday on signs of tightening supplies post implementation of sanctions on Iranian oil from early November. With the Organization of the Petroleum Exporting Countries (OPEC) members and leading non-OPEC oil producers saying they are in no hurry to increase output to make up for the loss of supply from Iran, concerns about supply have increased. Besides, the US Energy Secretary Rick Perry's remarks on Wednesday that the US will not open up its strategic petroleum reserves or put a cap on prices, supported rally in oil prices. Benchmark crude oil futures for November rose $1.13 or 1.6 percent to settle at $73.25 a barrel on the New York Mercantile Exchange. November Brent crude was up by $1 or 1.2 percent to settle at $82.72 a barrel on London's Intercontinental Exchanged.


Rising for the third straight day, Indian rupee ended marginally stronger against dollar on Friday, amid fresh selling of the American currency by exporters and banks. Traders took support with Finance Minister Arun Jaitley's statement that the ongoing trade war may have created initial instability, but will gradually open up opportunities for India as a bigger trading and manufacturing base. However, gains remained capped as anxiety remained among traders with Ecowrap report stating that the Reserve Bank of India (RBI) is expected to hike its key lending rate by 25 basis points in October. On the global front, dollar stood tall against its peers on Friday, hovering near a nine-month high versus the yen, after data reinforced upbeat views about the US economy and backed the Federal Reserve's signal for a steady course of rate increases over the next year. Finally, the rupee ended at 72.49, 11 paise stronger from its previous close of 72.60 on Thursday.


The FIIs as per Friday'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 8851.01 crore against gross selling of Rs 8229.30 crore, while in the debt segment, the gross purchase was of Rs 554.90 crore with gross sales of Rs 1106.33 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.16 crore against gross selling of Rs 1.60 crore.


The US markets ended mostly higher on Friday but the gains were limited after economic data painted a mixed picture of the economy. Asian markets were trading mixed in early deals on Monday, amid further signs of weakness in China. Erasing all of the early gains, the Indian markets ended lower on Friday after bouts of selling emerged in most sectors. Today, the start of the new month is likely to be on cautious note amid mixed Asian markets. Investors will be eyeing manufacturing PMI data to be out later in the day. Investors also looking ahead to the Reserve Bank of India's (RBI) outcome of the policy meeting on October 05, for further cues. Traders will be concerned with the RBI's report that India's external debt declined 2.8% to $514.4 billion at June-end over the previous quarter on account of a decrease in commercial borrowings, short-term debt and non-resident Indian (NRI) deposits. Besides, overseas investors pulled out a massive Rs 21,000 crore ($3 billion) from the capital markets in September, making it the steepest outflow in four months, on widening current account deficit amid global trade tensions. However, some support may come later in the day with Finance Minister Arun Jaitley's statement that the ongoing trade war may have created initial instability, but will gradually open up opportunities for India as a bigger trading and manufacturing base. Traders may take note of Assocham's report that India's exports hold a promising outlook with the US economy growing at its best in four years, coupled with the rupee depreciation leading to enhanced net revenue realizations. Besides, the IMF, World Bank and WTO in a joint report said that India's economic reforms and growth story offer compelling evidence that openness in services contributes to long run growth performance. There will be some buzz in telecom sector stocks with Fitch's latest report that the new telecom policy will help companies in serving growing data needs, cut costs and reduce red tape. It added private telecom companies' growth will be supported as the NDCP focuses to expand broadband coverage funded by the universal service obligation fund and in partnership with private telcos.


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  • L&T's construction arm -- L&T Construction -- has won orders worth Rs 1,477 crore across two business segments. 
  • IOC has signed a MoU with the Haryana government for setting up bio-CNG plants based on paddy straw and other agri-waste in the state. 
  • Maruti Suzuki's Vitara Brezza has achieved 4-star safety rating from Global NCAP. 
  • Sun Pharmaceutical Industries is looking to raise the share of complex generics and speciality products to its overall business portfolio going forward.
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