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NSE Intra-day chart (03 May 2017)
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Market Commentary 04 May 2017
Markets to make a cautious start on sluggish global cues

Indian equity benchmarks showed a volte-face on Wednesday as what started on a promising note ended as a dismal show. The optimism in local markets petered out completely by the end of trade and the benchmarks drifted into the negative territory despite getting off to a gap-up opening. Sentiments remained subdued on the report that Global agency Fitch Ratings retained the 'BBB-' sovereign rating-the lowest investment grade-on India as weak public finances continue to constrain India's ratings. The rating agency said that India's sovereign ratings balance a strong medium-term growth outlook and favourable external balances with a weak fiscal position and difficult business environment. Further, many investors remained on the sidelines and refrained from any buying activity ahead of the US Federal Reserve's policy outcome, due later today. The Fed is widely expected to stand pat on interest rates, but the post meet statement of the Fed chair Janet Yellen may offer hints on the possibility of a rate hike in June. Traders are largely indulging in stock specific activity, tracking quarterly earnings reports, sales and shipments data of automobile and cement companies, and other corporate news. Meanwhile, market participants got some comfort with the report that Prime Minister Narendra Modi is reviewing the progress of the government's agenda to curb black-money and tax evasion as well as the roll out of the Goods and Services Tax (GST). The government intends to implement the GST from July 1, 2017. Further, Asian Development Bank's (ADB's) Chief Economist Yasuyuki Sawada said the reforms like the GST and the new bankruptcy law will make it easier to do business in India. Finally, the BSE Sensex decreased 26.38 points or 0.09% to 29894.80, while the CNX Nifty was down by 1.85 points or 0.02% to 9,311.95.


The US markets extending the lackluster performance made a mixed closing on Wednesday, following the Federal Reserve's monetary policy announcement. In a widely expected decision Federal Reserve's left interest rates unchanged. After a two-day meeting, the Fed said it decided to maintain the target range for the federal funds rate at $0.75 to 1 percent and said recent data indicates that the labor market has continued to strengthen even as growth in economic activity slowed. The central bank also reiterated that it expects economic conditions will evolve in a manner that will warrant gradual increases in interest rates. The markets were in somber mood from the beginning reacting to quarterly results from tech giant Apple, which reported better than expected second quarter earnings but weaker than expected revenues and iPhone shipments. On the economic front, payroll processor ADP released a report showing that private sector employment increased roughly in line with economist estimates in the month of April. ADP said private sector employment climbed by 177,000 jobs in April after surging up by a revised 255,000 in March. The Dow Jones Industrial Average added 8.01 points or 0.04 percent to 20,957.90, on the other hand the Nasdaq declined by 22.82 points or 0.37 percent to 6,072.55 and the S&P 500 ended lower by 3.04 points or 0.13 percent to 2,388.13.


Crude oil futures snapped their losing streak on Wednesday despite mixed inventories report. Also as the Federal Reserve on Wednesday voted unanimously to leave its benchmark interest rate at 0.75% to 1%, but signaled another rate hike is imminent despite recent economic weakness. Meanwhile, U.S. Energy Information Administration (EIA) said domestic crude supplies fell by 900,000 barrels for the week ended April 28. Gasoline inventories grew by only 0.191 million against expectations for a rise of 1.322 million barrels while distillate stockpiles fell by 0.562 million barrels. Investors continued to monitor developments concerning a possible extension to an OPEC-led deal to curb prices, after Russia reported that it has achieved its reduction target a month ahead of schedule. Benchmark crude oil futures for June delivery ended up by $0.16 or 0.3 percent to $ 47.82 on the New York Mercantile Exchange. In London, Brent crude for June delivery ended higher by $ 0.32 at $50.78 on the ICE.


Extending its gains for the second straight session, Indian rupee strengthened on Wednesday due to sustained selling of the US currency by exporters and banks. Some support came with the report that the Reserve Bank of India (RBI) is expected to hold the key rate at its monetary policy review next month but may opt for a 25 bps cut in August. However, dollar strengthened against some currencies overseas and capped the rupee gains. On the global front, dollar inched up against most major currencies on Wednesday, as investors eyed a U.S. Federal Reserve statement later in the day for guidance on whether bets for a June interest rate hike are justified. Finally, the rupee ended at 64.15, 6 paise stronger from its previous close of 64.21 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 5682.40 crore against gross selling of Rs 6015.64 crore, while in the debt segment, the gross purchase was of Rs 813.84 crore with gross sales of Rs 253.66 crore.


The US markets after remaining in negative territory for most of the session made a mixed closing in the last session after the Fed left the key interest rates unchanged but made a hawkish policy statement, in a sign it was still on track for two more rate increases this year. The Asian markets have made a mixed start taking cues from the US markets, with traders in the region now pricing in a 72 per cent chance of a June rate hike, from 63 per cent before the Fed's statement. Metal stocks are under pressure in the region amid inventory concerns in industrial metals. The Indian markets losing their momentum in second half made a modestly lower ending in the last session, there was cautiousness ahead of the Fed's policy decision, investors' also awaited a televised debate between France's presidential rivals. Today, the start is likely to remain cautious as the Fed may have maintained status quo on policy rate but downplayed weak first quarter economic growth, indicating a further rate hike. There will be some support with Asian Development Bank's report that the Indian economy will grow 7.4 per cent this fiscal and 7.6 per cent in the next as the bankruptcy and GST laws will help create a more business-friendly environment. The banking sector stocks will be in action, as the Union Cabinet on Wednesday cleared an ordinance to empower the Reserve Bank of India (RBI) to reduce bad debts of public sector banks. The ordinance will empower the Reserve Bank to effectively deal with the problem of mounting bad loans in the banking sector. The steel sector too will be in action as the cabinet has given green signal to a new policy that aims to achieve steel making capacity of 300 million tonnes by 2030 with an additional investment of Rs 10 lakh crore. The Cabinet also approved a policy for use of domestic steel products in government organisations. There will be lots of earnings reaction, especially in banking sector, to keep the markets buzzing.


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  • Bajaj Auto has registered a marginal fall of 0.09% in total sales to 329,800 units in April 2017 against 330,109 units in April 2016.
  • ICICI Bank has made 100 villages digitally-enabled in 2017 in 100 days. The Bank is planning to transform another 500 by December 2017.
  • Reliance Corporate IT Park, a subsidiary of Reliance Industries has signed a Memorandum of Understanding with SAP SE to launch 'SARAL GST' solution for taxpayers in the GST regime.
  • Wipro has unveiled its new brand identity which signifies a higher level of engagement and brand permission.  
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