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NSE Intra-day chart (01 March 2019)
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Market Commentary 05 March 2019
Markets likely to open in red amid weak global cues


Friday turned out to be a great day for Indian equity benchmarks, with Sensex and Nifty ending the session above their 36,000 and 10,850 levels, respectively. The start of the day was jubilant, buoyed by World Bank's report that increasing exports can lead to better jobs and higher wages in India, including more formal sector employment for youth and women. Adding enthusiasm among traders, the Indian manufacturing sector strengthened further in the month of February, with a sharp and accelerated increase in sales boosting growth of output and employment. As per the survey report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 54.3 in February from 53.9 in January. Some comfort also came after Finance Minister Arun Jaitley expressed hopes that the remaining six public sector banks (PSBs) under the Reserve Bank of India's (RBI) prompt corrective action (PCA) framework will soon come out of it with the government commitment of support to them. The markets maintained their gains to end the day on strong note, amid Moody's report stating that the Indian economy is expected to grow at 7.3% in calendar year 2019 and 2020, and the government spending announced ahead of elections this year will support near-term growth. The market participants paid no heed towards slowdown of economic growth. India's gross domestic product (GDP) growth slowed to a five-quarter low of 6.6% in October-December period of this fiscal (FY19), as compared to 7% growth in the same quarter of FY18, on the back of lower farm and manufacturing growth and weaker consumer demand. Investors also overlooked reports that the growth of eight core infrastructure industries slowed down to 1.8% in January due to fall in output of crude oil, refinery products and electricity. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 134.8 in January, 2019. Finally, the BSE Sensex surged 196.37 points or 0.55% to 36,063.81, while the CNX Nifty was up by 71.00 points or 0.66% to 10,863.50.


The US markets ended lower on Monday after a report released by the Commerce Department unexpectedly showed a pullback in US construction spending in the month of December. The report said construction spending fell by 0.6% to an annual rate of $1.293 trillion in December after climbing by 0.8% to a rate of $1.301 trillion in November. The drop surprised participants, who had expected spending to edge up by 0.2%. The unexpected decrease came as spending on private construction slid by 0.6% to an annual rate of $991.2 billion after surging up by 1.3% to a rate of $997.1 billion in November. Spending on residential construction tumbled by 1.4% to a rate of $536.7 billion, more than offsetting a 0.4% increase in spending on non-residential construction to a rate of $454.5 billion. The Commerce Department said spending on public construction also dropped by 0.6% to an annual rate of $301.5 billion in December after tumbling by 1% to a rate of $303.5 billion in November. However, downside remained capped after private report said the US and China are in the final stage of negotiations on a long-term trade deal. A major trade deal between the US and China would likely provide a major boost to the global economy and remove significant uncertainty recently hanging over the markets. further, report said China is offering to lower tariffs and other restrictions on American products, while the US is considering removing most, if not all, sanctions levied against Chinese products since last year. Report also said President Donald Trump and Chinese President Xi Jinping are planning to meet later this month to finalize the agreement. Dow Jones Industrial Average dropped 206.67 points or 0.79 percent to 25819.65, S&P 500 declined 10.88 points or 0.39 percent to 2792.81 and Nasdaq was down by 17.79 points or 0.23 percent to 7577.57.


Crude oil futures ended higher on Monday as the Organization of the Petroleum Exporting Countries (OPEC) and its allies continue to cut back on crude production. Meanwhile, Russian Energy Minister Alexander Novak said that Russia will bring its oil production cut to 228,000 barrels a day from the October level. Some support also came in on expectations that the US-China trade talks would be beneficial to global economic growth, gave way to the reversal in equity markets that created a risk off atmosphere. Traders have been eyeing prospects for a US and China trade deal, which could be reached as early as this month. Beijing has offered to lower tariffs and other restrictions on American farm, chemical, auto and other products, while Washington is considering removing most, if not all, sanctions levied against Chinese products since last year. Benchmark crude oil futures for April rose 79 cents or 1.4 percent to settle at $56.59 a barrel on the New York Mercantile Exchange. May Brent crude gained 60 cents or 0.9 percent to settle at $65.67 a barrel on London's Intercontinental Exchange.


Reversing previous session's gains, Indian rupee ended weaker against the US dollar on Friday, on the back of consistent demand for the greenback from state-run banks and importers. Sentiment remain dampened with the Central Statistics Office's (CSO) data stating that India's economic growth slowed to a 5-quarter low of 6.6% in October-December period of this fiscal on the back of lower farm and manufacturing growth and weaker consumer demand. Some anxiety also spread among the local traders with the government's data showing that eight core industries grew at the slowest pace in 19 months in January as the production of crude oil, refinery products and electricity contracted. However, positive trend in equity market helped in restricting the slide in the Indian unit to some extent. On the global front, dollar moved higher on Friday, hitting a 10-week high against the yen, as a jump in US Treasury rates sent investors chasing higher yields into the greenback. Finally, the rupee ended at 70.92, 20 paise weaker from its previous close of 70.72 on Thursday.


The FIIs as per Friday'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 12931.83 crore against gross selling of Rs 12067.35 crore, while in the debt segment, the gross purchase was of Rs 256.25 crore with gross sales of Rs 3606.09 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.03 crore against gross selling of Rs 1.33 crore.


The US markets ended in red on Monday, following weak US construction data and investors awaited more details on an expected US-China trade deal. Asian markets are trading lower in early trade on Tuesday after China cut its economic growth target and pledged measures to support the economy amid growing challenges from rising debt and a dispute over trade and technology with the US. Indian markets before going for a long weekend posted strong gains on Friday as firm cues from Asia and Europe as well as signs of de-escalation of tensions at the border helped investors shrug off weak Gross Domestic Product (GDP) data. The markets remain closed on March 04 for Mahashivratri. Today, the start of the new week is likely to be in red after US President Donald Trump said he intends to end India's preferential trade treatment under the Generalized System of Preferences program (GSP) that allows $5.6 billion worth of Indian exports to enter the United States duty-free. Also, weak global cues may weight on the trading sentiment. On the domestic front, traders will be concerned with the Finance Ministry's statement that Goods and Services Tax (GST) collections in February dropped to Rs 97,247 crore from Rs 1.02 lakh crore in the previous month. The government has lowered the GST collection target for current fiscal to Rs 11.47 lakh crore in the revised estimates, from Rs 13.71 lakh crore budgeted initially. Traders will be eyeing the Nikkei India Services PMI for February 2019 will be released later in the day. Services PMI dipped to a three-month low of 52.2 in January 2019 from 53.2 in December 2018. However, some support may come later in the day with Economic Affairs Secretary Subhash Chandra Garg stating that spurt in PMI indicates strong inflow of new orders and strengthening of manufacturing sector growth. Meanwhile, investors may take note of India's chief economic adviser Krishnamurthy Subramanian's statement that India's next government will have to bring in land, labour and financial sector reforms to improve the productivity of the manufacturing sector and boost economic growth. There will be some buzz in the banking sector stocks with Crisil's report that the RBI's move to align risk weights of banks' exposure to non-banking finance companies (NBFCs) with their respective credit ratings will help banks to create a lending headroom of Rs 1.4 lakh crore. Besides, the RBI has imposed a total monetary fine of Rs 11 crore on four banks - Karnataka Bank, United Bank of India, IOB and Karur Vysya Bank - for non-compliance of directions on Swift messaging software. There will be some reaction in sugar sector stocks with report that the government's decision to provide up to Rs 10,540 crore as soft loans to sugar mills will help them in clearing arrears of cane growers by about Rs 9,000 crore. Sugar cane arrears to farmers have crossed Rs 20,000 crore in the current marketing year 2018-19 (October-September).


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  • Bajaj Auto has registered a rise of 10% in total sales to 393,089 units in February 2019 against 357,883 units in February 2018. 
  • Tata Motors has enhanced its Hexa range of lifestyle SUVs with the launch of the Hexa 2019 edition. 
  • Maruti Suzuki India has reported total sales of 148,682 units in February 2019, as compared 149,824 units in February 2018, registering marginal fall of 0.8%. 
  • Bharti Airtel has unveiled special offers with larger data bundles and other exclusive benefits for its customers upgrading to the new Xiaomi Redmi Note 7 series.
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