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NSE Intra-day chart (02 July 2019)
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Market Commentary 03 July 2019
Markets to open marginally in green amid sharp fall in crude oil prices


Indian equity indices staged late recovery after early fall on Tuesday's trading session, with Sensex and Nifty reclaiming their crucial levels of 39,800 and 11,900, respectively. After a cautious start, key indices entered into negative terrain, as the finance ministry said that Goods and Services Tax (GST) collection registered at Rs 99,939 crore in the month of June 2019. The growth was sluggish as compared to Rs 1,00,289 crore in May 2019. Adding more worries, the audit report of Comptroller and Auditor General of India (CAG) showed that total service tax arrears rose to Rs 1.66 lakh crore in 2017-18, up from Rs 1.18 lakh crore in the preceding financial year. But in the second half of the day, benchmarks erased all of their losses to end in positive terrain. Domestic sentiments got boost, after Finance Minister Nirmala Sitharaman said economic growth is high on the agenda of the Narendra Modi 2.0 government and various steps are being taken to accelerate the GDP. Traders took some support with reports that the growth of India's eight core sectors has improved to 5.1% in May 2019 against 4.1% in the same month last year, helped by rise in output in steel and electricity. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 138.7 in May 2019. Finally, the BSE Sensex gained 129.98 points or 0.33% to 39,816.48, while the CNX Nifty was up by 44.70 points or 0.38% to 11,910.30.


Extending their previous session gains, the US markets ended higher on Tuesday even as trading in assets perceived as safe havens, like US Treasuries, benefitted from pessimism about the global economic outlook and the prospect of an ongoing trade war with China. The choppy trading seen for most of the day came amid renewed uncertainty about global trade after the US proposed new tariffs on more European goods as part of an ongoing dispute over aircraft subsidies. The US Trade Representative issued a supplemental list of approximately $4 billion worth of products that could potentially be subject to additional duties. The USTR is adding the supplemental list to an initial list of $21 billion worth of products published on April 12. The threat of additional tariffs comes as the US and the European Union have been engaged in a long-running World Trade Organization dispute regarding EU aircraft subsidies. While the US and China have agreed to restart stalled trade talks, the news is a reminder that President Donald Trump is fighting a trade war on multiple fronts. Traders also seemed somewhat reluctant to make more significant moves amid a quiet day on the US economic data front. Besides, a slew of data is scheduled to be released on Wednesday, although traders may remain away from their desks ahead of the holiday on Thursday. Dow Jones Industrial Average surged 69.25 points or 0.26 percent to 26786.68, Nasdaq gained 17.93 points or 0.22 percent to 8109.09 and S&P 500 was up by 8.68 points or 0.29 percent to 2973.01.


Crude oil futures ended sharply lower on Tuesday amid global demand worries. Trade negotiations play out against a backdrop of recent data exposing vulnerabilities in the global expansion. Factory activity slowed across much of Europe, Asia and the US in June. Broader economic concerns continue to hang over tightening fundamentals, with demand side fears helping to drag prices lower. Meanwhile, the market should keep a close eye on the weekly US petroleum supply data, particularly after US crude and product stocks have posted surprisingly strong draws the last two weeks. Both crude benchmarks marked the lowest finish for a front-month contract since June 19. Benchmark crude oil futures for August dropped $2.84 or 4.8 percent to settle at $56.25 a barrel on the New York Mercantile Exchange. September Brent declined $2.66 or 4.1, percent to settle at $62.40 a barrel on London's Intercontinental Exchange.


Indian rupee ended unchanged compared to its previous close, even as crude oil prices eased. Anxiety also remained among the traders with India Meteorological Department's statement that Monsoon deficiency in June this year was the highest for the month since 2015. The month ended with 33 per cent deficiency which translates to around 67 per cent of the Long Period Average (LPA). Several parts of the country have been witnessing drought-like situation. However, traders took some support with Finance Minister Nirmala Sitharaman's statement that economic growth is high on the agenda of the Narendra Modi 2.0 government and various steps are being taken to accelerate the GDP. On the global front, dollar edged lower on Tuesday as optimism from a weekend trade truce between the United States and China faded. Finally, the rupee ended unchanged from its previous close of 68.95 on Monday.


The FIIs as per Tuesday'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 5183.26 crore against gross selling of Rs 6046.29 crore, while in the debt segment, the gross purchase was of Rs 838.60 crore with gross sales of Rs 314.96 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.94 crore against gross selling of Rs 0.86 crore.


The US markets ended higher on Tuesday but gains were kept in check after the US threatened a new wave of tariffs on European goods, dampening recent optimism surrounding the Washington-Beijing trade truce. Asian markets are trading mostly lower on Wednesday as global trade concerns weighed on investor sentiment. Indian markets ended higher for second consecutive session on Tuesday, with gains of over one third of a percent, led by gains in oil and gas, IT and financial stocks. Today, the markets are likely to make slightly positive start amid sharp fall in crude oil prices and hopes that the government could announce measures in the fiscal Budget to ease liquidity situation and boost the slowing economy. Investors will be eyeing Services PMI data to be out later in the day. Some support will come with Finance Minister Nirmala Sitharaman's statement that India still continues to be the fastest growing economy and demonetisation has had no effect on the Indian economy. Some support may also come with report that Minister of Commerce and Industry Piyush Goyal has called for establishing a framework to increase farm exports from Rs 2.75 lakh crore to about Rs 7 lakh crore by 2024-2025. Goyal said a cooperative sector export promotion forum will be established as an exchange platform for cooperatives to make farmers and agriculture-based industries self-reliant. Traders may take note of report that the apex NBFC body Finance Industry Development Council (FIDC) said they should be allowed to avail of refinance facility under the Mudra scheme and also setting up of a permanent refinance window at RBI similar to the one that National Housing Bank (NHB) offers them to help meet their liquidity needs. The liquidity crisis has seen a massive 19 percent points drop in disbursement by NBFCs in the fourth quarter of FY19. However, some cautiousness may come with the finance minister's statement that India's state-owned banks had classified Rs 1.50 trillion ($21.76 billion) worth of loans as wilful defaults in 2018-19, with the biggest lender State Bank of India accounting for nearly a third. Meanwhile, the government may impose anti-dumping duty on imports of certain types of filament yarn from China, Korea, Taiwan and Thailand as the commerce ministry has started investigation into alleged dumping of the product following complaints from domestic players. There will be some buzz in the Information Technology (IT) stocks with Crisil's report that scaling up and the need to build digital capabilities will lead to faster consolidation among the mid-tier information technology companies in India. Also, there will be some reaction in metal stocks with Icra's report that the waiver of 2.5% duty on imports of iron ore lumps, fines and pellets can bring much relief to the domestic steel makers after March 2020, when merchant mines across the country are headed for expiry. There will be some buzz in the sugar stocks with a report that sugar prices are expected to remain stable or slightly higher at Rs 34-35 per kg in the coming months following the surplus situation even as the production is likely to fall during 2019-20.


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  • Coal India has reported marginal rise of 0.5% in coal production at 45.08 million tonnes in June this year, but offtake declined by 1.6% to 48.86 million tonnes in the same month.  
  • Bharti Airtel and Bharti Hexacom have completed the merger of the consumer mobile businesses of TTSL and TTML. 
  • HCL Technologies has completed the planned acquisition of select IBM products for $1.8 billion in an all-cash deal for security, marketing, commerce, and digital solutions. 
  • M&M has launched an innovative new Automated Manual Transmission version of its popular compact SUV, the XUV300, making it even easier to own and drive.
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