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NSE Intra-day chart (02 April 2018)
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Market Commentary 03 April 2018
Markets to make negative start on weak global cues


Monday turned-out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges recapturing their crucial 10,200 (Nifty) and 33,200 (Sensex) levels, ahead of the RBI policy meeting on April 4-5, although the central bank is unlikely to raise rates despite increased risks to inflation posed by rising oil prices and a hike in minimum support price (MSP) announced in the Budget 2018. After making a mildly positive start, local bourses extended gains with State Bank of India's (SBI) research report Ecowrap stating that the Index of Industrial Production (IIP) may grow in the range of 8-9% in February and March 2018, with a healthy growth in SBI Composite Index, an indicator for tracking India's manufacturing activity. Traders also took some encouragement with Chief Economic Adviser Arvind Subramanian's statement that GST and demonetisation are done and India can now propel itself into a higher growth trajectory. Some optimism also came with Niti Aayog CEO Amitabh Kant's statement that India will reap benefits of the structural and institutional reforms in the next couple of years. Traders shrugged off report that India's fiscal deficit accelerated to Rs 7.15 lakh crore for the period April-February 2017-18 or 120.3% of the budgeted target for the current fiscal year. Net tax receipts in the first 11 months of 2017/18 fiscal year were Rs 1.03 trillion. Traders also ignored a private report that the value of private equity and venture capital investments in Indian companies during the quarter ended March 2018 declined 49 per cent to $3.7 billion across 133 deals, compared with $7.3 billion across 200 deals during the same quarter the previous year. Meanwhile, the e-way (electronic way) bill system under Goods and Services Tax (GST) for inter-state movement of goods has come into force from April 1, with over 1.7 lakh electronic invoices expected to have generated on the first day of the rollout aimed at curbing tax evasion by traders and transporters. Finally, the BSE Sensex surged 286.68 points or 0.87% to 33,255.36, while the CNX Nifty was up by 98.10 points or 0.97% to 10,211.80.


The US markets closed lower on Monday, driven by both uncertainty surrounding trade policy and weakness in the large-capitalization technology and internet sectors. Trade policy continued to be in the forefront in the minds of investors after China announced tariffs on about 130 US goods, including a 25% penalty slapped on US pork and 15% on fruit. The news means China has made good on its threat to retaliate against the Trump administration's tariffs on Chinese steel and aluminum imports. Besides, the Trump administration this week will unveil a list of advanced technology Chinese imports targeted for US tariffs to punish Beijing over technology transfer policies, a move expected to intensify trade tensions between the world's two largest economies. On the economic front, the ISM manufacturing report for the same month came in at 59.3, compared with a previous monthly reading of 60.8. Separately, US factory activity slowed in March amid shortages of skilled workers and rising capacity constraints, but growth in the manufacturing sector remains underpinned by strong domestic and global economies. The Dow Jones Industrial Average lost 458.92 points or 1.90 percent to 23,644.19, the Nasdaq dropped 193.326 points or 2.74 percent to 6,870.12, while the S&P 500 was down by 58.99 points or 2.23 percent to 2,581.88.


Crude oil futures edged lower in thin trading on Monday, as the geopolitical concerns that underpinned last week's rally faded. Decline was also supported by report that Saudi Arabia is expected to cut prices for all crude grades it sells to Asia in May to reflect weaker prices for its Middle East benchmark Dubai crude. Moreover, rise in Russian production too dented sentiments. Russia reported its March oil production rose in March to an 11-month high of 10.97M bbl/day, slightly above a limit agreed under the global supply agreement. Benchmark crude oil futures for May delivery declined $1.93 or 3 percent at $63.01 a barrel on the New York Mercantile Exchange. May Brent crude shed $1.59 or 2.3 percent to settle at $67.75 a barrel on London's Intercontinental Exchange.


The Indian currency market has been closed since Thursday last week on account of a long holiday weekend, while the Indian rupee weakened further against the American currency on Wednesday, following bouts of month-end dollar demand from banks and importers. Traders remained cautious with a private report stating that weak macroeconomic indicators like current account deficit and inflation have exposed India to adverse global macro developments such as US monetary policy trajectory and trade war risks. Investors even ignored the commerce ministry's statement that India and China have agreed to draw-up a medium and long term roadmap with action points and timelines in order to increase bilateral trade in a balanced and sustainable manner. Besides, extremely bullish dollar sentiment overseas coupled with sluggish equity markets also adversely impacted local unit. On the global front, dollar pushed higher against a basket of the other major currencies on Wednesday as trade tensions remained elevated following reports that China will soon announce a list of retaliatory tariffs on US imports. Finally, the rupee ended at 65.18, 22 paise weaker from its previous close of 64.96 on Tuesday.


The FIIs as per Wednesday's data were net buyers in equity and debt segments both, in equity segment, the gross buying was of Rs 6242.79 crore against gross selling of Rs 5148.87 crore, while in the debt segment, the gross purchase was of Rs 2326.84 crore with gross sales of Rs 1677.54 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.21 crore against gross selling of Rs 10.01 crore.


The US markets ended sharply lower on Monday after China announced it is imposing tariffs on 128 imported goods originating in the U.S. The move by China was in response to President Donald Trump's decision to impose tariffs on steel and aluminum imports. All the Asian markets are trading in red in early deals, with Japan leading losses in the region after markets stateside came under pressure from the drop in tech stocks and trade-related worries. Indian shares ended notably higher on Monday as trading resumed after a four-day holiday weekend. Today, the markets are likely to open in red, with escalating trade tensions between the U.S. and China. Investors will also be cautious ahead to the Reserve Bank of India's (RBI) policy decision on April 5 for directional cues. The central bank is expected to maintain status quo on rates despite increased risks to inflation posed by rising oil prices and a hike in minimum support price (MSP) announced in the Budget 2018. Traders will also remain concern with ICRA's report that more Indian companies are likely to default on their borrowings in the fiscal year that started in April compared with the previous year on higher interest costs and a deterioration in business conditions. However, traders will get some support later in the day with report that a steep rise in output of cement and fertilisers pushed up the growth of the core sector to 5.3% in February even as refinery products, electricity, coal, and natural gas production made the output of the infrastructure industries grow slower than 6.1% in January. There will be buzz in banking stocks after the RBI allowed banks to stagger the bond investment depreciation provisioning over four quarters. Meanwhile, rating agency Crisil has warned that the ongoing probes into the frauds and allegations of improprieties against bankers will dent credit growth in the new fiscal year.


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  • Maruti Suzuki India has sold 160,598 units in March 2018, a growth of 14.9% compared to same month last year. 
  • NTPC has commissioned 1st unit of 660 MW of Meja Thermal Power Project of Meja Urja Nigam on March, 31, 2018. 
  • Tech Mahindra has received the 2018 AT&T Supplier Award for its outstanding performance and service to AT&T affiliates during the past year. 
  • Hero MotoCorp has closed the fiscal on a strong note of growth, clocking its highest-ever monthly sales of 730,473 units in the month of March 2018, registering a growth of 20%.
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