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NSE Intra-day chart (01 November 2017)
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Market Commentary 02 November 2017
Markets likely to see some consolidation after the big rally

Wednesday turned out to be a remarkable day of trade for Indian equity benchmarks where bulls tightened their grip on Dalal Street, with Nifty and Sensex hitting fresh record highs and ending above their crucial 10,400 and 33,600 levels, respectively. The market mood remained up-beat through the day and benchmarks fervently gained strength to strength, as investors continued hunt for fundamentally strong stocks. Key gauges made a gap-up opening on report that India's ranking in the World Bank ease of doing business survey for 2018 climbed to record 30 notches to 100, as a range of regulatory and policy reforms put in place by the Union and state governments over the past four years started delivering results. The survey also recognized India as one of the top five reformers in this year's assessment. Further support also came with Department of Industrial Policy and Promotion (DIPP) secretary Ramesh Abhishek's statement that the government is working with the World Bank to recognise over 200 reforms that will help propel India into the top-50 bracket in ease of doing business. Domestic bourses continued to move northward till end at all time high levels, with up-beat economic data also providing strength. The Core sector growth hit a six-month high in September. The index of eight core industries was up 5.2% in September, compared with 4.4% in August and 5.3% in September last year. Also, fiscal deficit improved to 91.3% of the budget estimate at the end of September from 96.1% at the end of August as revenues picked up pace. Fiscal deficit is pegged at Rs 4.99 lakh crore at the end of September, down about Rs 26,000 crore from August as second instalment of corporate taxes allowed revenue to exceed spending in the month. The markets participants paid no heed towards the report that growth in India's manufacturing sector lost momentum in October month. The Nikkei India Manufacturing Purchasing Managers' Index fell from 51.2 in September to 50.3 in October. Finally, the BSE Sensex soared 387.14 points or 1.17% to 33,600.27, while the CNX Nifty was up by 105.20 points or 1.02% to 10,440.50.

The US markets made a mixed closing on Wednesday as the major averages gave up some ground following the Federal Reserve's announcement of its latest monetary policy decision. The Fed said that data received since the September meeting indicates the labor market has continued to strengthen and that economic activity has been rising at a solid rate despite hurricane-related disruptions. The Fed also said that inflation for items other than food and energy remained soft but continued to predict inflation would stabilize around its 2 percent objective over the medium term. The central bank also reiterated its expectation that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate. On the economy front, payroll processor ADP released a report showing stronger than expected private sector job growth in the month of October. ADP said private sector employment climbed by 235,000 jobs in October after rising by a downwardly revised 110,000 jobs in September. A separate report from the Institute for Supply Management showed a slowdown in the pace of growth in the manufacturing sector in October. The ISM said its purchasing managers index fell to 58.7 in October from 60.8 in September. The Dow Jones Industrial Average added 57.77 points or 0.3 percent to 23,435.01 and the S&P 500 edged higher by 4.10 points or 0.2 percent to 2,579.36, while the Nasdaq declined by 11.14 points or 0.2 percent to 6,716.53.

Crude oil futures got a halt to their rally on Wednesday despite data showing supplies of U.S crude oil and gasoline declined more-than-expected, as the Energy Information Agency (EIA) reported that US oil production grew by 46,000 barrels a day (bpd) to 9.55 million barrels a day, not far off the June. 5, 2015 record high of 9.61 million barrels per day while weekly U.S. crude oil exports rose to an all-time high of 2.13 million barrels per day. The report overshadowed a separate report from EIA showing crude and gasoline stockpiles declined more than expected while distillate fell less-than-expected. Inventories of US crude fell by roughly 2.4 million barrels in the week ended Oct. 27. Gasoline inventories fell by 4 million barrels, while supplies of distillate fell by about 320,000 barrels. Benchmark crude oil futures for December delivery ended lower by 8 cents at $54.30 a barrel on the New York Mercantile Exchange. Brent crude for December delivery weakened by 45 cents to $60.49 a barrel on the ICE.

Indian rupee continued its upward march for the third straight session on Wednesday, on persistent selling of the American currency by exporters. Traders took some encouragement with report that India's ranking in the World Bank ease of doing business survey for 2018 climbing a record 30 notches to 100, as a range of regulatory and policy reforms put in place by the Union and state governments over the past four years started delivering results. Traders largely shrugged off the report that growth in India's manufacturing sector lost momentum in October month. Though, US currency's strength against other units limited further appreciation of Indian currency. On the global front, dollar steadied against a basket of major currencies on Wednesday as investors eyed a policy decision from the US Federal Reserve later in the day. Finally, the rupee ended at 64.59, 15 paise stronger from its previous close of 64.74 on Tuesday.

The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 6307.20 crore against gross selling of Rs 6362.29 crore, while in the debt segment, the gross purchase was of Rs 3161.37 crore with gross sales of Rs 1397.83 crore.

The US markets made a mixed closing in the last session, coming off their record highs reached in initial trade after the Federal Reserve's announcement of its latest monetary policy decision. It left interest rates unchanged as widely expected and offered support for the December rate hike. The Asian markets have made a mixed start and some indices are trading in red as investors digest news that President Donald Trump picked Jerome Powell to lead the Federal Reserve. The Indian markets zoomed to their fresh record highs in the last session, on jubilation of huge jump in India's ranking in World Bank's Doing Business 2018 report. Today, the start is likely to be a bit cautious and some consolidation can be seen at the record high levels on sluggish global cues. PSU banking stocks will keep buzzing, as the government in a bid to push consolidation among state run lenders has said that the alternative Mechanism headed by finance minister Arun Jaitley may also direct banks to examine proposals for amalgamation. A three-member ministerial panel on PSU bank consolidation led by finance minister Arun Jaitley has been formed, the other members of the panel are railway and coal minister Piyush Goyal and defence minister Nirmala Sitharaman. Markets may get some support with a private report stating that India's current account deficit (CAD) for this financial year is expected to be around $ 40 billion, or 1.5 per cent of GDP. CAD rose sharply to $ 14.3 billion, 2.4 per cent of GDP, at the end of first quarter of 2017-18. Auto stocks will continue to remain in focus after the announcement of their monthly sales numbers, as sales of most manufacturers cooled in October after dispatches to dealers moderated with the festive season end. There will be some action in the steel stocks too, as the Union Steel Minister Chaudhary Birender Singh has called for coastal shipping of steel products to boost growth of the sector.

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


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  • Tata Motors has reported domestic sales growth of 5% at 48,886 units, in October 2017, compared to October 2016, last year.
  • HDFC Bank is expanding its SmartUp zones across niche branches in Bengaluru following in the footsteps of RBL and SBI who launched dedicated branches last year.
  • M&M has reported its auto sales performance for October 2017 which stood at 51,149 vehicles, compared to 52,008 vehicles during October 2016, representing a fall of 1.65%.
  • Bharti Airtel is planning to bring the anniversary edition iPhone X to India through its digital store Airtel Online on November 3.

News Analysis