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NSE Intra-day chart (04 December 2017)
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Market Commentary 05 December 2017
Markets likely to make a somber start

Indian equity benchmarks ended the choppy day of trade with marginal gains on Monday, as traders remained on the sidelines ahead of Reserve Bank of India's (RBI) monetary policy meeting which is scheduled to begin on December 5. The central bank is widely expected to keep rates on hold, investors will watch out for any hints of a cut in its policy statement. Markets after a cautious start gained some ground and traded in green for most part of the day's trade but in narrow range. Sentiments remained positive with former vice-chairman of NITI Aayog Arvind Panagariya's statement that the economy will grow by over 6.5% in the current financial year. He said the macroeconomic indicators have remained stable for the past three years with current account deficit hovering around one per cent and inflation moderating. Traders also took some solace 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. Finance Minister Arun Jaitley's statement that the GST has made doing business easier for traders, to spread business activities in the country, too aided sentiments. He added the market place for traders had opened the horizons and there is lesser tax compliance burden. However, gains remained capped with Chief Economist at World Bank Kaushik Basu expressing disappointment at the 6.3% GDP expansion in the September quarter said that with oil prices so low, India's economic growth should have been back at over 9%. He added that this massive slowdown needs to be properly diagnosed. Sentiments also weighed down on private report stating that CPI inflation is expected to firm up in the coming months driven by cyclical recovery in the economy and further implementation of pay commission-related hikes by states. Finally, the BSE Sensex gained 36.78 points or 0.11% to 32,869.72, while the CNX Nifty was up by 5.95 points or 0.06% to 10,127.75.


The US markets closed mostly lower on Monday, with the S&P 500 and the Nasdaq slipping, as large-capitalization technology names took a beating. Early Saturday, the Senate passed the Republican-sponsored tax reform proposal almost entirely along party lines, which being viewed as a key victory for US President Donald Trump. Progress on the Republican tax plan was in the spotlight, while investors continued to watch for news of the special counsel's probe of US President Donald Trump's election campaign. Meanwhile, according to new Fed research, while inflation moved closer to the US central bank's 2 percent target in September and October following months of lackluster results, its increase reflected gains in goods and services that aren't necessarily linked to monetary policy. On the economy front, US factory orders fell 0.1% in October largely because of fewer bookings for passenger planes, cars and trucks. The decline was concentrated in large aircraft and autos, two volatile categories that often distort the headline number. Orders excluding transportation climbed 0.8%. The Nasdaq dropped 72.22 points or 1.05 percent to 6,775.37, the S&P 500 edged lower by 2.78 points or 0.11 percent to 2,639.44, while the Dow Jones Industrial Average added 58.46 points or 0.24 percent to 24,290.05.


Crude oil futures declined on Monday, on the back of profit booking by traders on the recent rally which followed last week's decision by Opec and some non-Opec producers to extend output curbs. Traders were also concerned with EIA report last week that US output rose in September to 9.5 million barrels per day (bpd), the highest monthly output since 2015. However, despite fears over rising U.S. output recent data showed traders increase their bullish bets on oil as net longs rose 39,500 to 651,100, the highest since April. Benchmark crude oil futures for January delivery ended lower by $0.89 or 1.5 percent at $57.47 a barrel on the New York Mercantile Exchange. Brent crude for February delivery was down by 1.8 percent to $62.48 a barrel on the ICE.


Indian rupee appreciated against US dollar on Monday, as fresh sale of the US currency by exporters paced up. Local currency got some support with Niti Aayog Vice-Chairman Rajiv Kumar's statement that the 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. Besides, gains in the rupee were also due to local equity markets which somehow managed a positive close. However, dollar's strength against major global currencies overseas capped the rupee's gain. Meanwhile, investors remained on sidelines ahead of RBI monetary policy meeting which is scheduled to begin on December 05. On the global front, dollar rose against a trade-weighted basket of currencies on Monday after the US Senate approved a tax overhaul at the weekend, though the gains were limited by doubts that interest rates would rise as a result. Finally, the rupee ended at 64.37, 9 paise stronger from its previous close of 64.46 on Thursday.



The FIIs as per Monday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 20704.03 crore against gross sell of Rs 21306.86 crore, while in the debt segment, the gross purchase was of Rs 2181.09 crore with gross sales of Rs 2374.49 crore.


The US markets made a mixed closing in the last session and while the Dow reached a new record closing high, the Nasdaq and the S&P 500 ended the day in negative territory. Traders were cautiously reacting to news that Senate Republicans narrowly approved a massive tax reform bill early Saturday morning. The Asian markets have made a mixed start tailing the US markets and after the gains in US equities spurred by the tax bill passage petered. The Indian markets despite mild choppy trade managed a modestly positive close in the last session. Today, the start is likely to be soft-to-cautious amid sluggish global trend and as the global credit rating agency Fitch Ratings has cut India's FY18 GDP growth forecast to 6.7 percent from 6.9 percent projected earlier, saying the rebound was weaker than expected due to one-off factors like the demonetization program and disruptions related to the implementation of GST. Simultaneously, the global rating agency has pared the FY19 forecast for the country to 7.3 per cent from 7.4 per cent. Traders will be eyeing the two-day policy review by RBI beginning today. The Reserve Bank is likely to keep the key rate unchanged on Wednesday and stay focused on inflation control as the rebound in September quarter GDP growth. There will be some buzz in the export oriented stocks as the key policymakers led by Commerce Minister Suresh Prabhu will unveil the mid-term review of the foreign trade policy today. Exporters have been voicing concerns about challenges on account of implementation of GST.


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  • ITC expects chocolate category to contribute 10% to its food division revenue in next five years. It had entered into chocolate category with brand Fabelle in May last year.
  • Tata Motors has delivered 50 new buses to Bengaluru Metropolitan Transport Corporation.
  • Coal India has reported 9.2% rise in coal supply to power plants to 290.59 MT in the first eight months of the current fiscal, driven by high loading of rakes.
  • Yes Bank in collaboration with Tata Power Delhi Distribution has made live a new and easy payment mode for its consumers - UPI.
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