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NSE Intra-day chart (02 August 2017)
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Market Commentary 03 August 2017
Markets to make a sluggish start on soft regional cues

Indian equity benchmarks retreated from record highs and ended the session with a cut of around one third of a percent on Wednesday, as Reserve Bank of India's (RBI's) decision to lower the policy rate by 25 bps to 6% failed to boost sentiment. This was the first rate cut since October 2016 and the interest rate is now at a 6-year low. No change in cash reserve ratio (CRR) too dampened sentiments. Though, markets started the session on positive note, as traders took some encouragement with Minister of State for Finance Santosh Kumar Gangwar's statement that the government has collected over Rs 1.80 lakh crore in direct tax till July 15 in the current fiscal, an increase of 21.4% year-on-year, ‘belying' fears of slowdown in economic activities. The current growth rate is higher than the target rate of 15.32% required to achieve the Budget Estimate. Meanwhile, Finance Minister Arun Jaitley has said that the GST Council, at its next meeting later this week, will finalise a mechanism to operationalise anti-profiteering clause which seeks to protect consumers' interest. GST Council comprising state finance minister will meet on August 5 to take stock of implementation of GST which was rolled from July 1. However, markets turned red and extended fall despite the announcement of a 25 basis points cut in the repo rate by RBI, as the markets appear to have already factored in a quarter percentage point rate cut. Traders also remained concerned after finance minister Arun Jaitley cautioned that the fiscal deficit of states may rise this year, with states likely to tap the markets to raise funds to finance farm debt waivers. Some cautiousness also came with the Central Electricity Authority's (CEA) statement that about 7% of India's coal-fired power plants may never be able to comply with new environmental norms because they lack the space to install emission-cutting equipment, potentially leading to their shutdown. Finally, the BSE Sensex shed 98.43 points or 0.30% to 32,476.74, while the CNX Nifty was down by 33.15 points or 0.33% to 10,081.50.


The US markets closed mostly higher on Wednesday, with the Dow finishing above the 22,000 threshold for the first time, with sharp gains for Apple helping the blue-chip index to notch its seventh straight daily rise as Nasdaq struggled. Adding to the positive tone on the day, private sector hiring remained strong in July as employers added 178,000 jobs. ADP revised June's gain to 191,000. Details of ADP's report showed that small private-sector businesses added 50,000 jobs in July, medium-size businesses added 83,000 and large businesses added 45,000. Most of those gains were in the service sector - 174,000 jobs added there, compared with only 4,000 for goods producers. Meanwhile, San Francisco Fed President John Williams said that the US economy will likely be strong enough for the Federal Reserve to trim its bond holdings in September, in a sign the central bank was close to unwinding a controversial stimulus tool. He added that he was comfortable with the view that the Fed could raise interest rates once more this year and around three times next year. The Dow Jones Industrial Average added 52.32 points or 0.24 percent to 22,016.24, the S&P 500 edged higher by 1.22 points or 0.05 percent to 2,477.57, while the Nasdaq lost 0.29 points to 6,362.65. 


Crude oil futures made some recovery and ended higher on Wednesday, as investors cheered data showing supplies of U.S. crude fell for the fifth-straight week while refinery activity continued to grow. Crude prices though were under pressure in the early trade but recovered after a report from the Energy Information Administration (EIA) showed crude and gasoline stockpiles fell last week, pointing to an uptick in demand for crude and refinery activity. EIA reported that inventories of U.S. crude fell by roughly 1.5m barrels in the week ended July 28. Gasoline inventories fell by roughly 2.5m barrels, while distillate stockpiles fell by 150,000 barrels. Benchmark crude oil futures for September delivery gained $0.42 or 0.87 percent to $49.59 on the New York Mercantile Exchange. In London, Brent crude for September delivery ended higher by 0.71 percent at $52.15 a barrel on the ICE.


Indian rupee appreciated against US dollar to hit over 2-year high and breached 64-mark on Wednesday, on increased liquidation of the American currency by exporters and banks. Local currency gained further momentum after the Reserve Bank of India (RBI) decided to cut its key policy rate, or the repo rate, by 25 bps to 6%, which was in line with market expectations. On the global front, dollar was near 15-month lows against a currency basket on Wednesday as investors turned their attention to key economic events this week, particularly Friday's US jobs report for July. Finally, the rupee ended at 63.70, 38 paise stronger from its previous close of 64.08 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 4579.68 crore against gross selling of Rs 5499.50 crore, while in the debt segment, the gross purchase was of Rs 3249.80 crore with gross sales of Rs 2005.58 crore.


The US markets made mostly a positive close in the last session and the, Dow notched a psychological milestone at 22,000, highlighting a steady record ascent for the blue-chip benchmark.  The Asian markets have made mostly a negative start, with investors assessing the strength of company earnings before American labor-market data provides the latest clues on the health of global growth. The Japanese market too was down as the yen rose against the dollar. The Indian markets kept losing pace through the day after a positive start and ended with cuts of over a quarter percent in the last session, as the RBI's 25 bps repo rate cut and no change in cash reserve ratio fell short of market expectations. Today, the start is likely to remain somber and the weakness may extend amid the soft global cues. Traders will ponder rate outlook, a day after the RBI maintained its neutral stance, citing record low inflation. Most of the market participants are not expecting any further rate cut this year, saying the present low inflation print is not sustainable. However, the Bankers have said the RBI's move to cut its policy rate by 0.25 percentage point would help boost credit demand, improve investor sentiment and propel growth. Traders will also be getting some support with Finance Minister Arun Jaitley's indications that there could be scope for rationalisation of rates under the Goods and Services Tax (GST) as its implementation progresses. Jaitley also said that he was under pressure to change the GST Network which people said was faulty but felt the structure was correct. Additionally, John Chambers, Chairman of the newly-formed US-India Strategic Partnership Forum, predicted that India would turn out to be a role model for the world economies. He said India will figure among the top three economic powers in the world over the next 10-15 years. There will be some buzz in the telecom sector, on report that the government may soon consider the telecom industry's demand of doing away with telecom circles and will work towards the concept of one nation, one network and one licence. There will be lots of important earnings during the day to keep the markets in action.


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  • Hero MotoCorp has sold 623,269 units of two-wheelers in July 2017, registering a healthy growth of 17.1% over the corresponding month of the previous fiscal when the company sold 532,113 units.
  • Lupin has reported a fall of 59.40% in its consolidated net profit at Rs 358.06 crore for the quarter ended June 30, 2017 as compared to Rs 881.95 crore for the same quarter in the previous year.
  • Coal India has reported provisional production of 36.64 million tonnes  in July 2017, as against a target of 37.66 MT.
  • NTPC is planning to add 20 more charging stations for electric vehicles after successfully commissioning two charging stations in Delhi.
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