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NSE Intra-day chart (01 December 2017)
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Market Commentary 04 December 2017
Markets to make a cautious start of the new week

Friday turned out to be a dismal day of trade for Indian equity benchmarks, where frontline gauges ending with a cut of around a percentage point on mixed economic data. Traders also remained on sideline ahead of Reserve Bank of India (RBI) Policy, Federal Reserve meet and Gujarat assembly elections. Markets started on optimistic note but soon gave up all their gains to enter into red terrain, as traders turned cautious after the eight core sectors grew at a slower pace of 4.7% in October, chiefly due to subdued performance of cement, steel and refinery segments. Market participants also remained a bit cautious with India's fiscal deficit at the end of October hitting 96.1% of the budget target for 2017-18 on account of lower revenues and increase in expenditure. The fiscal deficit was 79.3 per cent in the same period last year. Markets somehow managed to cap losses for most part of the day taking support from good Gross Domestic Product (GDP) numbers for the second quarter ended September. Reversing a five-quarter slide and setting itself on course for revival GDP rose 6.3% in the July-September period, compared with the three year low of 5.7% growth in the April-June quarter and 7.5% in the year earlier. Reacting to the GDP growth data, Finance Minister Arun Jaitley has said the impact of demonetization and GST is behind us and growth in coming quarters will be on upward trajectory. But, selloff in last leg of trade mainly dragged the markets below their crucial 32,900 (Sensex) and 10,150 (Nifty) levels. Sentiments remained dampened with chief statistician TCA Anant's statement that the Goods and Services Tax (GST) regime, which kicked in from July 1, has posed fresh a new challenge for calculating India's GDP. GST has consolidated a welter of local and central levies such as value added tax, excise and service tax into a single levy. Also, traders failed to draw any sense of relief with the Nikkei India Manufacturing Purchasing Managers' Index, or PMI, which rose to a 13-month high of 52.6 in November from October's 50.3. It enlightened that growth in output and new orders picked up to the fastest since October 2016, reportedly supported by reductions in GST rates and stronger underlying demand conditions. Finally, the BSE Sensex tumbled 316.41 points or 0.95% to 32,832.94, while the CNX Nifty was down by 104.75 points or 1.02% to 10,121.80.


The US markets closed lower on Friday, after news surrounding former national-security adviser Michael Flynn added an element of political uncertainty into markets, though the issue wasn't seen as derailing a market rally that gave the Dow its best week of the year. Trading was volatile, with major indexes mostly opening higher, though they fell sharply in the immediate aftermath of the Flynn news. However, all three indexes clawed back losses throughout the afternoon on optimism over expectations lawmakers would make additional progress on tax-cut legislation. Flynn is the second member of Trump's campaign to reach a deal with the special counsel investigating Russia's alleged interference in the US election. On the economy front, the Institute for Supply Management said its manufacturing index slipped to a still-strong reading of 58.2% last month from October's 58.7%. The ISM's new orders index rose 0.6 points to 64% and the production index climbed 2.9 points to 63.9%, setting a six-year watermark. The employment gauge was little changed at a still-strong 59.7%.  The Dow Jones Industrial Average lost 40.76 points or 0.17 percent to 24,231.59, the Nasdaq dropped 26.387 points or 0.38 percent to 6,847.59, and the S&P 500 edged lower by 5.36 points or 0.20 percent to 2,642.22.


Crude oil futures made a positive close on Friday, as OPEC producers voted to extend supply cuts through 2018. However, prices came off session highs as financial markets reeled from an ABC News report that added to concerns about President Donald Trump's exposure to a probe into Russian meddling in last year's campaign. Also, there were some concern with Russian officials expressing concern that extending the output cuts might encourage rival U.S. shale firms to pump more crude. Meanwhile oil services firm Baker Hughes reported that the total active U.S. rig count, which includes oil and natural-gas rigs, added 6 to 929.  Benchmark crude oil futures for January delivery ended higher by $0.96 or 1.7 percent at $58.36 a barrel on the New York Mercantile Exchange. Brent crude for February delivery was up by 1.8 percent to $63.73 a barrel on the ICE.


Indian Money market remained closed on Friday on account of Id-e-Milad. 


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 4859.48 crore against gross selling of Rs 5481.92 crore, while in the debt segment, the gross purchase was of Rs 1607.38 crore with gross sales of Rs 1479.42 crore.


The US markets despite coming off their worst levels of the day ended lower in the last session, on report that former National Security Adviser Michael Flynn is prepared to testify that then-candidate Donald Trump directed him to make contact with the Russians. The Asian markets have made a mixed start of the new week, with some indices trading modestly in red, though others were trading higher on report that US Senate passed tax-cut legislation, drawing focus away from events in the continuing investigation into connections between Donald Trump's aides and Russia. The Indian markets extended their plunge in the last session and the major averages lost another around a percent, as growing fiscal deficit concerns overshadowed positive GDP and manufacturing data. Today, the start of the crucial week is likely to be cautious and traders will be eyeing the RBI policy meet outcome on December 6 after the upbeat GDP numbers for the September quarter. Though, Niti Aayog Vice-Chairman Rajiv Kumar has said that the September quarter growth rebound shows that the economy has come out of the woods and economic expansion for the full year will come in at 6.5-7 percent. Traders will be getting some support with the statement of Mukesh Ambani, Reliance Industries chairman  that India's GDP will double to $ 5 trillion in the next seven years and hit $ 10 trillion by 2030 as it will elbow out China by the middle of 21st century. Meanwhile, the International Monetary Fund (IMF) has said that it will update its growth rate forecast for India in January. There will be some buzz in the media stocks, on a private report that the Indian media and entertainment (M&E) industry would nearly double in size by 2022, clocking 11-12 per cent CAGR between 2016 and 2022. The report further said that the industry would also be able to generate direct and indirect employment of 4 million people in the next four to five years. PSU stocks too will be in focus on report that the Centre is likely to come up with expression of interest (EOI) for strategic sale in three-to-four out of the 16 odd public sector units (PSUs) shortlisted.


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  • Maruti Suzuki India has sold a total of 154,600 units in November 2017, growing 14.1% over the same period of last fiscal.
  • Cipla's subsidiary - Cipla Holding B.V., has entered into an agreement to sell its 100% equity stake in Cipla Croatia.
  • Bajaj Auto has registered a jump of 21% in total sales to 3,26,458 units in November 2017 against 2,69,948 units in November 2016.
  • Tata Motors has reported strong sales numbers in November 2017 continuing its turnaround trend of the past few months.
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