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NSE Intra-day chart (02 August 2018)
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Market Commentary 03 August 2018
Markets likely to make optimistic start on positive global cues


Extending previous session losses, Indian equity benchmarks ended the Thursday's trade with a cut of around a percent, breaching their crucial 37,200 (Sensex) and 11,250 (Nifty) levels, following the 25 basis points (bps) hike in repo and reverse repo rates by the Reserve Bank of India (RBI) on Wednesday. That apart, weak global sentiment on account of rising trade war fears also impacted sentiment. Markets started the session on pessimistic note and never looked in recovery mood to end near intraday low levels. Sentiments remained dampened since beginning, as traders remained concerned with RBI Governor Urjit Patel flagging the risks to macroeconomic stability from a potential currency war in the wake of rising global trade tensions. Also, traders reacted negatively on EEPC India chairman Ravi Sehgal's statement that the 25 bps increase in the interest rates by the RBI is a big negative for exporters, as they would become less competitive in a tough global market that is already facing the threat of tariff war. Markets extended losses in second half of the session as traders paid no heed towards report that RBI has maintained its growth outlook for the economy, estimating the country's Gross Domestic Product (GDP) to grow at 7.4% in 2018-19. It noted that GDP growth would range between 7.5-7.6% in H1 and 7.3-7.4% in H2. The market participants failed to take any support with Finance Minister Piyush Goyal's statement that GST revenues will go up in the coming months on improved compliance and market demand. Traders even overlooked the Cabinet's approval to GST laws amendments which included hiking threshold limit for availing composition scheme dealers to Rs 1.5 crore, among other things. Finally, the BSE Sensex declined 356.46 points or 0.95% to 37,165.16, while the CNX Nifty was down by 101.50 points or 0.89% to 11,244.70.


The US markets ended mostly in green on Thursday, as an historic milestone for Apple (AAPL) contributed to a substantial advance by the tech-heavy Nasdaq. Apple became the first U.S. company to reach a $1 trillion market capitalization as traders continued to react positively to its upbeat fiscal third quarter results and guidance. However, renewed trade war concerns weighed on some of the other Dow components after President Donald Trump's administration confirmed reports it is considering raising the rate of tariffs on Chinese imports. U.S. Trade Representative Robert Lighthizer said Trump has directed him to consider increasing the proposed tariff rate on $200 billion worth of Chinese goods to 25 percent from the previously announced 10 percent. Meanwhile, traders were also looking ahead to the release of the Labor Department's closely watched monthly jobs report on Friday. Employment is expected to increase by 190,000 jobs in July, while the unemployment rate is expected to edge down to 3.9 percent. A day ahead of the release of the monthly report, the Labor Department released a report showing a modest increase in initial jobless claims in the week ended July 28th. The report said initial jobless claims inched up to 218,000, an uptick of 1,000 from the previous week's unrevised level of 217,000. Traders had expected jobless claims to rise to 220,000. A separate report from the Commerce Department showed factory orders climbed by 0.7 percent in June, matching traders' estimates. The S&P 500 gained 13.86 points or 0.49 percent to 2,827.22 and Nasdaq jumped 95.24 points or 1.24 percent to 7,802.69, while the Dow Jones Industrial Average was down by 7.66 points or 0.03 percent to 25326.16.


Crude oil futures ended higher on Thursday, marking a sharp reversal from earlier declines as data reportedly showing a dip in stockpiles at the domestic delivery hub at Cushing, Okla, helped provide a boost to prices. Energy market data provider Genscape showed a week-on-week decline of 3.6% in stocks to roughly 24.6 million barrels on July 31. Growing concerns surrounding Iranian oil also contributed to oil's gains Thursday. As per a report, Iran was preparing for a drill in the Persian Gulf that may threaten to shut the Strait of Hormuz, a key world chokepoint for oil shipping. Benchmark crude oil futures for September gained $1.30 or 1.9 percent to settle at $68.96 a barrel on the New York Mercantile Exchange. October Brent crude advanced $1.06 or 1.5 percent at $73.45 a barrel on London's Intercontinental Exchange.


Snapping 2-day winning streak, Indian rupee ended considerably weaker against dollar on Thursday, as demand for the American unit from importers and banks picked up. Sentiments turned pessimistic with RBI Governor Urjit Patel flagging the risks to macroeconomic stability from a potential currency war in the wake of rising global trade tensions. Investors even overlooked a report that RBI has maintained its growth outlook for the economy, estimating the country's Gross Domestic Product (GDP) to grow at 7.4% in 2018-19. It noted that GDP growth would range between 7.5-7.6% in H1 and 7.3-7.4% in H2. Besides, poor performance of the domestic equity market, too affected the rupee. On the global front, dollar rallied on Thursday as the Federal Reserve's upbeat assessment of the economy combined with a flare-up in the trade tensions between the United States and China to boost demand for the U.S. currency. Finally, the rupee ended at 68.71, 28 paise weaker from its previous close of 68.43 on Wednesday.


The FIIs as per Thursday'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 4596.85 crore against gross selling of Rs 4872.79 crore, while in the debt segment, the gross purchase was of Rs 1837.12 crore with gross sales of Rs 455.49 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.01 crore against gross selling of Rs 3.13 crore.


The US markets ended mostly higher on Thursday, as investors eyeing the July US jobs report due later on Friday, which will give a reading on the health of the world's largest economy and possible clues about the pace of Federal Reserve interest rate rises. Asian markets were trading mixed in early deals on Friday, as investors were cautious amid an elevation in trade tensions between the US and China. Indian equity markets ended lower on Thursday, as investors scrambled for the exit amid a flare-up in Sino-US trade tension and the 25-basis point hike in the repo rate by the RBI to cool down inflation. Today, the markets are likely to make positive start, taking support from a private report that India's economic growth momentum is likely to pick up further in the April-June period and the country is expected to clock GDP growth of 7.5% in this financial year. Investors will also be eyeing Services PMI data for the month of July to be out later in the day. However, there will be some cautiousness with the International Monetary Fund in its latest report stating that Real interest rates in India may drop by more than 150 basis points over the next decade. It said that a decline in the India's dependent youth (those from ages 0-15 years) between 2020 and 2030 is expected to result in a reduction of long-term interest rates in the country. Traders will also be concerned with former Reserve Bank Governor C Rangarajan's statement the full implementation of recent hike in Minimum Support Prices (MSP) for some of the agricultural products may push financial system under stress. Some anxiety may also be persist with Chairman of GST Implementation Committee Sushil Modi's statement that revenue collection might fall in the next 3-4 months due to rate cuts on a number of items totalling to Rs 70,000 crore. Meanwhile, the trade ministry has said India plans to delay the imposition of retaliatory duties on US goods, to allow time to resolve disputes that worsened after President Donald Trump imposed tariff hikes on steel and aluminium. There will be buzz in markets, as around 82 companies will report their results for the quarter ended June today. 


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



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Hindalco Industries






  • TCS has launched Jile, the first of its kind Agile DevOps product-on-cloud to plan, deliver and track Agile programs within the enterprise.
  • Hero MotoCorp has sold 679,862 units of two-wheeler in the month of July 2018, registering a growth of 9% over the corresponding month of the previous fiscal when it sold 623,269 units. 
  • Coal India has reported provisional coal production of 40.56 MT in July 2018, as against 36.69 MT reported during corresponding month of previous year. 
  • Tata Motors has registered an impressive growth of 21% in its domestic sales at 51,896 units in July 2018, as against 42,775 units over last year.
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