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NSE Intra-day chart (05 September 2017)
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Market Commentary 06 September 2017
Markets mood set for a soft start on weak global cues

Indian equity benchmarks ended the volatile day of trade with a gain of around half a percent, with frontline gauges recapturing their crucial 31,800 (Sensex) and 9,950 (Nifty) levels, as traders went for bargain hunting after yesterday's drubbing. Markets made an optimistic start with traders taking encouragement with Prime Minister Narendra Modi's statement at BRICS Summit 2017 that India is fast changing into one of the most open economies in the world, with improvements on global indices and the biggest ever reform GST weaving the nation into one unified market. Investors also took note that the all powerful GST Council may consider lowering tax on items of common consumption if the high trajectory of collections continues over the next few months. The tax reduction could be either on items of common consumption or a cut in headline rate which will benefit consumers. However, markets pared all of their initial gains and entered into red terrain in noon deals with market participants turning cautious with the domestic rating agency Crisil lowering its growth forecast to 7 percent for fiscal 2018, down from 7.4 percent earlier, as it sees disruptions arising from the implementation of the new uniform tax regime to continue to impact the economy for a few more quarters. Sentiment was also hampered after activity in India's dominant services sector contracted for a second straight month in August on disruptions caused by GST hurt new orders.  August's Nikkei/IHS Markit Services Purchasing Managers' Index rose to 47.5, from July's 45.9 but still below the 50 mark that separates expansion from contraction. Finally, the BSE Sensex surged 107.30 points or 0.34% to 31,809.55, while the CNX Nifty was up by 39.35 points or 0.40% to 9,952.20.


The US markets closed lower on Tuesday, with the S&P 500 snapping a six-day winning streak, as investors focused on heightened tensions between the West and North Korea and worries about a lack of progress on President Donald Trump's pro-growth agenda. Low trading volume, particularly as investors returned from a holiday-lengthened Labor Day weekend, added to the downbeat tone on Wall Street. On the economy front, factory orders for July slumped after being propelled in the previous month by a flurry of orders for Boeing aircraft. Orders fell 3.3% in July, after an upwardly revised 3.2% gain in June. That's the biggest monthly drop in nearly three years. Orders for non-defense capital goods excluding aircraft jumped 1%. Meanwhile, Federal Reserve Governor Lael Brainard pointed out that inflation has not hit the Fed's 2% annual target over the past five years and the recent soft inflation may be due to depressed underlying inflation. The Dow Jones Industrial Average lost 234.25 points or 1.07 percent to 21,753.31, the Nasdaq dropped 59.76 points or 0.93 percent to 6,375.57, and the S&P 500 edged lower by 18.7 points or 0.76 percent to 2,457.85.


Crude oil futures extended their gains and surged on Tuesday, as Gulf Coast refineries resumed operations, following the disruptions caused by Hurricane Harvey last week. Prices were supported by a stronger dollar and concerns about rigs in the Gulf of Mexico. Just a week after Hurricane Harvey, Hurricane Irma is bearing down on Caribbean islands and may be heading for the Gulf of Mexico as a category 4 or 5 storm. Benchmark crude oil futures for October delivery ended up by $1.37 or 2.91 percent to $48.66 on the New York Mercantile Exchange. In London, Brent crude for October delivery ended higher by 1.70 percent at $53.24 a barrel on the ICE.


Falling for the third-straight session, Indian rupee ended weaker against the US dollar on Tuesday, due to increased demand of the greenback from the importers and the banks. Sentiments remained down-beat with the domestic rating agency Crisil lowering its growth forecast to 7 percent for fiscal 2018, down from 7.4 percent earlier, as it sees disruptions arising from the implementation of the new uniform tax regime to continue to impact the economy for a few more quarters. However, dollar weakened overseas along with gains in the local equity markets, limited the further slide of the currency. On the global front, dollar slipped against Japanese yen on Tuesday as global tensions simmered amid signs that North Korea could conduct more missile tests. Finally, the rupee ended at 64.13, 7 paise weaker from its previous close of 64.05 on Monday.


The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 2236.20 crore against gross selling of Rs 3082.73 crore, while in the debt segment, the gross purchase was of Rs 793.33 crore with gross sales of Rs 956.87 crore.


The US markets coming after a long weakened suffered sharp selloff in the last session with tech heavy Nasdaq suffering its biggest one day fall in last three months. The decline was in reaction to geopolitical concerns following news North Korea conducted a major nuclear test on Sunday. The Asian markets have made mostly a soft start tailing the weakness in the US markets overnight with persisting North Korean worries. Traders girded for a potential intercontinental ballistic missile launch by Pyongyang, which will celebrate its "foundation day" Saturday.  The Indian markets picked up pace in the second half of the last session to post decent gains and the benchmarks reclaimed their crucial levels despite some weak macro data. Today, the start is likely to be a bit somber on sluggish global cues. Fresh North Korean tension has gripped the markets across the world. There will be buzz in the markets with the government saying that names of over 2.09 lakh firms have been struck off from register of companies for failing to comply with regulatory requirements and action has been initiated to restrict operations of their bank accounts. The Centre has also stepped up action against such entities by bringing in restrictions on the operation of their bank accounts by their existing directors and authorised representatives. There will be some buzz in the garment and textile sector, as the garment exporters have asked the Centre for clarity on the refund process for Integrated Goods and Services Tax (IGST) paid on import of machinery as they were not in a position to use input tax credit. Banking stocks too will be in action as former RBI Governor Raghuram Rajan has said that the biggest challenge is cleaning up the balance sheets of public sector banks.


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  • Wipro has launched its newest digital pod in Edinburgh, Scotland, deepening its commitment to offer digital services at close proximity to its UK and European customers.
  • ONGC will raise its first debt ever, of Rs 25,000 crore, to part fund the Rs 37,000 crore acquisition of government's stake in HPCL.
  • Maruti Suzuki India has reported 23.34% rise in its production to 1,57,863 units in August 2017, as compared to 1,27,991 units in August 2016.
  • TPDDL, a joint venture of Tata Power and the Government of Delhi, will roll out 2.5 lakh smart meters in the first phase of the project in its licensed area of 510 sq km in North and North-West Delhi.
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