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NSE Intra-day chart (02 June 2017)
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Market Commentary 05 June 2017
Markets to make a positive start of the new week

Indian benchmark equity indices staged a wonderful performance on the last day of the week by gaining close to half percent in the session and conquering their psychological levels. The indices ended at record highs on Friday, tracking upbeat trend in global markets, while hopes of good southwest monsoon rains also lifted sentiment. Market participants took some encouragement with the Moody's Investors Service stating that India's key reforms, including the impending goods and services tax and resolution of sticky loans may improve the country's credit profile.  Some support also came with NITI Aayog Vice Chairman Arvind Panagariya's statement that India will regain the crown of the fastest growing major economy, overtaking China, as early as the first quarter of 2017-18. He said that India, on an annual basis, is ahead of China and will regain the growth momentum soon on the back of host of reforms initiated by the Modi government in the last three years.  Besides, the appreciation in rupee value against the dollar added to the optimistic sentiments. Rising for the third straight day, Indian rupee strengthened by 14 paise to 64.34 against the US dollar in early trade on sustained selling of the American currency by banks and exporters. However, broader gains were capped due to caution ahead of the Reserve Bank of India's policy meeting next week. The central bank is expected to keep rates on hold on June 7, though it could soften its hawkish tone after data showed easing inflation. On the global front, Asian equity markets ended higher on Friday, as a set of upbeat economic data from the US and Europe helped investors shrug off US President Donald Trump's decision to withdraw from the Paris climate agreement. US factory activity ticked up in May after slowing for two straight months and private employers stepped up hiring, suggesting the economy is regaining speed after struggling at the start of the year. While Chinese stocks ended little changed as investors fretted over tighter liquidity and slowing economic growth, Japan's Nikkei share average broke through the 20,000-point barrier for the first time since December 2015. Meanwhile, all the major European counterparts were trading in the green where major indices like CAC and DAX were trading with a gain of over half a percent at this point of time. Finally, the BSE Sensex gained 135.70 points or 0.44% to 31273.29, while the CNX Nifty was up by 37.40 points or 0.39% to 9,653.50.


The US markets closed higher on Friday, led by gains in technology shares, as investors looked past a weaker-than-expected May jobs report. Despite the unexpectedly low print on the jobs report, expectations for a rate increase in June didn't fall. The New York Federal Reserve said it left its tracking estimate on US gross domestic product in the second quarter at 2.17 percent, unchanged from a week ago, based on this week's data on jobs, trade, consumer spending and factory activity. On the economy front, the nation's trade deficit rose 5.2% in April, keeping the US on track to post a bigger gap in 2017 than in 2016. The deficit climbed to $47.6 billion in April from a revised $45.3 billion in March. Exports slipped 0.3% to $191 billion, largely owing to decline in autos, networking equipment and consumer goods such as pharmaceuticals. Imports edged up 0.8% to $238.6 billion. Separately, the US added a modest 138,000 new jobs in May and hiring earlier in the spring was weaker than initially reported, adding to evidence that the tightest labor market in years is making it harder for companies to fill open jobs. The Dow Jones Industrial Average added 135.53 points or 0.65 percent to 21,144.18, Nasdaq was up 48.31 points or 0.78 percent to 6,246.83, while S&P 500 edged higher by 18.26 points or 0.76 percent to 2,430.06.


Crude oil futures slumped on Friday and extended the weekly losses, as President Donald Trump's decision to withdraw from the 2015 Paris climate agreement, sparked concerns that U.S. oil production could expand rapidly in the absence of a stringent focus on curbing the use of fossil fuels. The Paris Agreement laid out a framework for countries to adopt clean energy and phase out fossil fuels such as oil, coal and natural gas. Crude also came under pressure as the industry figures showed US drillers added rigs for the 20th week in a row. Oilfield services firm Baker Hughes reported its weekly count of oil rigs rose by 11 to a total 733. Domestic oil companies have been adding rigs at a furious pace in 2017 in an effort to glean market share from OPEC and Russia. Benchmark crude oil futures for July delivery ended lower by $0.70 or 1.5 percent to $47.66 on the New York Mercantile Exchange. In London, Brent crude for July delivery ended lower by $0.47 to $50.16 on the ICE.


Rising for the third straight day, Indian rupee ended marginally higher against dollar on Friday due to sustained selling of the US currency by exporters and banks. Domestic currency got some support with NITI Aayog Vice Chairman Arvind Panagariya's statement that India will regain the crown of the fastest growing major economy, overtaking China, as early as the first quarter of 2017-18. Besides, dollar's weakness against some other currencies overseas and a firm domestic equity market backed up the rupee. On the global front, dollar hit a one-week high against the yen on Friday after upbeat US private sector job figures, while the closely-watched non-farm payrolls report out later in the global day could provide another boost. Finally, the rupee ended at 64.43, 4 paise stronger from its previous close of 64.47 on Thursday.


The FIIs as per Friday'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 4547.31 crore against gross selling of Rs 4998.12 crore, while in the debt segment, the gross purchase was of Rs 2316.78 crore with gross sales of Rs 1157.53 crore.


The US markets extended their gains in last session, overlooking a weaker than expected jobs data, as the World Bank forecasted a modest pickup in growth despite uncertainty about monetary policy and concern among bond traders that inflation is waning. The Asian markets have made a mixed start, with some indices trading in red, as the most recent US data is testing bets on improving global growth that has helped drive the value of equities worldwide. The Indian markets showing a steady trade ended higher in the last session, tracking upbeat global market. Today, the start of the crucial week is likely to be in green and traders will be getting some support with a World Bank report that successful demonetisation will help in raising revenues on sustained basis as more and more people will come under the tax net. Though, the traders will be cautious ahead of the Reserve Bank of India's monetary policy committee (MPC) meeting, whose outcome will be known on Wednesday. Also, there will be some concern with terror attack in London. Meanwhile, an Assocham-Thought Arbitrage Research Institute Paper has said that sectors such as construction and real estate, beauty and wellness, organised retail, transport and logistics hold the maximum job potential in India in the near future. There will be some action in the gold and jewellary stocks, as following the 15th meeting of the GST Council meeting, GST rates for a number of commonly-used items, including footwear, apparels and gold were announced. Gold, gold jewellery, silver and diamond will be taxed at 3 percent. Gold currently attracts 1 percent excise duty and 1 percent VAT (more for some states), equaling to 2 percent. There will be some buzz in the IT sector too, as the Union IT minister Ravi Shankar Prasad dismissing as 'completely wrong' the reports of a downturn in the Indian IT sector has said a good number of people will get jobs in the current fiscal. The IT minister said firms like TCS and Infosys have said they would recruit thousands of professionals in the current fiscal.


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  • Bharti Airtel has received the approval of the SEBI, BSE and NSE for the proposed scheme of merger between Airtel and Telenor (India) Communications.
  • Coal India has reported provisional production of 40.74 million tonnes in May 2017, as against a target of 44.09 MT.
  • Tata Motors passenger and commercial vehicle total sales in May 2017 were at 38,361 vehicles, lower by 4% over 40,123 vehicles sold in May 2016.
  • Mahindra and Mahindra's South Korean subsidiary SsangYong Motor, has sold a total of 12,349 units in May 2017 - 10,238 units in domestic sales and 2,111 units in exports.
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