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NSE Intra-day chart (03 January 2018)
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Market Commentary 04 January 2018
Markets to make a positive start on firm global cues

Paring all of their early gains, Indian equity benchmarks once again ended flat on Wednesday, as traders remained on sidelines ahead of ahead of corporate results for the third quarter FY18 to be released later this month and service PMI data to be released tomorrow. However, markets made optimistic start with key gauges hitting their crucial 10,500 (Nifty) and 34,000 (Sensex) levels in morning deals with traders reacting positively to the last day's report of manufacturing PMI rising to 54.7 in December 2017 from 52.6 in November on the back of robust improvement in the health of the sector since December 2012. Some support also came with the Rajya Sabha unanimously passing the Insolvency and Bankruptcy Code (Amendment) Bill that replaces an Ordinance that prevents unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code. Traders also took some encouragement with foreign brokerage report stating that India's growth rate is expected to accelerate over the coming year and is likely to improve further to 7.6% by 2019-20 as key sectors would revive from disruptions related to the implementation of GST and demonetization. The report further said the recovery in India's GDP growth will likely be relatively gradual, preventing price pressures from rebounding and allowing the Reserve Bank of India to keep rates on hold for the time being. However, really got fizzled out and markets ended lower with traders booking all of their early gains ahead of key corporate results starting next week. Investors are awaiting corporate results, including from Tata Consultancy Services and Infosys that are scheduled next week, amid signs the economy is recovering after the withdrawal of high-denomination currency bills in late 2016 and the introduction of a national goods and services tax last year. Meanwhile, the government has notified lower 1% GST rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it. The finance ministry has notified the changes decided by the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, in November 2017. Finally, the BSE Sensex slipped 18.88 points or 0.06% to 33,793.38, while the CNX Nifty was up by 1.00 points or 0.01% to 10,443.20.


The US markets closed higher on Wednesday, with the main benchmarks closing at fresh all-time highs. The positive trading mood from 2017 appeared to continue into 2018, with stocks in Asia and the US kicking off the New Year on a strong note. The main benchmarks held on to earlier gains after the minutes from the latest Federal Reserve meeting showed a distinct lack of unity over the central bank's projection of three rate hikes in 2018. The Federal Reserve in December forecast three rate hikes in 2018 but minutes of that central bank meeting show a distinct lack of unity with the projection. The minutes portray two camps, of roughly the same size, who are both uncomfortable with the forecast - and for completely different reasons. On the economy front, the Institute for Supply Management said Wednesday its manufacturing index rose to 59.7%, the second-highest reading of the year, from 58.2% in November. Readings over 50% indicate more companies are expanding than shrinking. Sixteen of the 18 industries tracked by ISM reported growth. Across the subcomponents, production rose to 65.8 from 63.9 and new orders jumped to 69.4 from 64. The Dow Jones Industrial Average added 98.67 points or 0.40 percent to 24,922.68 and the Nasdaq gained 58.633 points or 0.84 percent to 7,065.53, and the S&P 500 edged higher by 17.25 points or 0.64 percent to 2,713.06.


Crude oil futures turned higher on Wednesday ahead of the inventory data and as ongoing anti-government protests in Iran raised the prospect of supply disruptions. Iran's elite Revolutionary Guards reportedly deployed forces to three provinces in an effort to quell anti-government unrest. The prospect of fresh supply disruption has offset the impact of pipeline restarts in both Libya and North Sea. Meanwhile, the American Petroleum Institute was slated to report its stockpiles survey in afternoon, followed by the Energy Information Administration's weekly report next day. Benchmark crude oil futures for January delivery ended higher by $1.26 or 2.1 percent at $61.63 a barrel on the New York Mercantile Exchange. Brent crude for March delivery was up by 1.89 percent to $67.84 a barrel on the ICE.


Snapping its four-day winning streak, Indian rupee ended marginally weaker against dollar on Wednesday, due to demand for greenback by banks and importers. Investors remained sidelines ahead of services PMI data which is scheduled to be release on January 04, 2017. However, losses were limited as some support came with a private report stating that India's growth rate is expected to accelerate over the coming year and are likely to improve further to 7.6% by 2019-20 as key sectors would revive from disruptions related to the implementation of GST and demonetization. On the global front, dollar held near a four-month low on Wednesday, having declined nearly 3% in the last three weeks as investors cut positions before manufacturing data and minutes of a December US Federal Reserve meeting due later in the day. Finally, the rupee ended at 63.53, 5 paise weaker from its previous close of 63.48 on Tuesday.


The FIIs as per Wednesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 3166.29 crore against gross selling of Rs 2546.92 crore, while in the debt segment, the gross purchase was of Rs 863.27 crore with gross sales of Rs 1175.42 crore. Besides, in the hybrid segment, there was no buying against gross selling of Rs 2.16 crore.


The US markets surged to fresh closing highs in the last session, as upbeat data added to recent optimism about the economic outlook. Also, stocks remained positive following the release of the minutes of the Federal Reserve's latest monetary policy meeting. The Asian markets have made a strong start with Japanese market surging to a 10-year high as solid economic data from the United States and Germany reinforced investors' optimism while oil prices hovered at around two and half year high. The Indian markets lost their way in the final hours and ended flat in last session, despite firm cues from global markets, as traders' awaited corporate earnings to give further cues. Today, the start is likely to be in green on positive global cues. Traders will also be getting some support with NITI Aayog's expectation that the first strategic disinvestment of Central Public Sector Enterprises will be conducted within the current financial year. It said that the process of divestment is being carried out by DIPAM (Department of Investment and Public Asset Management) and the first transactions are expected in the current financial year after a long gap of 14 years. Meanwhile, the Union Cabinet has approved the revised model concession agreement for public private partnership projects in major ports. The amendments were made in the MCA to attract more investments in the port sector and are expected to clear the hurdles created by some of the provisions in the current model concession agreement. There will be some somberness in the IT stocks on reports that the US is considering new regulations to prevent the extension of H-1B visas as part of president Donald Trump's 'Buy American, Hire American' initiative, a move which could hit tech firms and hundreds of thousands of Indian IT professionals. The infra stocks too will be in focus after the government approved Rs 12,178 crore worth of infrastructure projects and an AIIMS in Bilaspur in Himachal Pradesh to be constructed at a cost of Rs 1,351crore.


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



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Tata Motors





Coal India





  • NTPC has recorded its highest ever quarterly generation of 67,781 MUs during Q3 of 2017-18.
  • SBI and rural development bank NABARD have inked a MoU with five NGOs of West Bengal state for promoting 2,500 Joint Liability Groups.
  • M&M's subsidiary - SsangYong Motor Company has sold a total of 143,685 vehicles in 2017.
  • Coal India may miss out on meeting its production target of 600 MT in 2017-18, going by the production pattern during the first nine months of the year.
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