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NSE Intra-day chart (03 November 2017)
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Market Commentary 06 November 2017
Markets to get a soft-to-cautious start

Friday turned out to be a fabulous day of trade for Indian equity benchmarks where Nifty and Sensex once again scaled fresh record highs and ended above 10,450 and 33,600 levels, respectively. Despite some initial volatility, markets gained momentum and traded jubilantly throughout the session, as sentiments remained up-beat with the government's statement that it has approved foreign direct investment (FDI) proposals worth Rs 24.56 crore, including one from Sterling Commerce Solutions India. Markets extended their northward journey mainly after the Nikkei India Services Purchasing Managers' Index rose to 51.7 in October from September's 50.7 due to greater inflows of new business. The report enlightened that service providers retained an optimistic outlook regarding business activity over the coming 12 months, while the labor market was further reinforced as firms raised their payroll numbers over the month.  Traders also took some comfort with Prime Minister Narendra Modi's statement that starting business in India is easier than ever before as procedures have been simplified, archaic laws repealed and compliance requirements reduced. Meanwhile, responsible or sustainable investment in India is at a niche stage as assets deployed under this strategy amount to nearly $31 billion, while globally it stood at a whopping $22.89 trillion. Adding to the optimism, former RBI governor Raghuram Rajan termed the government's announcement to infuse Rs 2.11 lakh crore in PSU banks as good news saying it is important for banks to have capital for lending going forward. He added that public sector banking system is a big part of Indian system and it is about 70%. Investors took note of the Reserve Bank of India (RBI) statement that corporate borrowers who fail to get a Legal Entity Identifier (LEI) number from banks won't be given credit. The schedule for getting the LEI number is spread out till December 2019 and depends on exposure. Finally, the BSE Sensex gained 112.34 points or 0.33% to 33,685.56, while the CNX Nifty was up by 28.70 points or 0.28% to 10,452.50.


The US markets closed at records on Friday, with major indexes extending their lengthy upward moves on the back of strong results at Apple, which offset a mixed set of economic data, including a lackluster October jobs report. For the week, the Dow added 0.5%, the S&P was up 0.3% and the Nasdaq advanced 0.9%. The week marked the eight straight weekly gain for both the Dow and the S&P, the longest such streak for both since November 2013. The Nasdaq marked its sixth positive week in a row, matching a streak that ended in early March. Meanwhile, Minneapolis Federal Reserve Bank President Neel Kashkari said that there is no sign of rising inflation and that the US central bank should hold off on raising interest rates until that change. Kashkari, who is a voter on this year's rate-setting committee, has repeatedly said the Fed should wait to raise borrowing costs again until inflation hits its 2-percent goal. On the economy front, the US economy added 261,000 jobs in October as employment rebounded from barely any gain in the prior month due to hurricanes Harvey and Irma. Unemployment dipped to 4.1% from 4.2% and sat near a 17-year low, but the decline stemmed in part from a 765,000 plunge in the number of people in the labor force. The Dow Jones Industrial Average added 22.93 points or 0.10 percent to 23,539.19, the Nasdaq gained 49.492 points or 0.74 percent to 6,764.44, and the S&P 500 edged higher by 7.99 points or 0.31 percent to 2,587.84.


Crude oil futures surged on Friday to end at fresh two year highs, on the back of data showing signs of U.S. production tightening as US oil rig counts fell to a nearly six-month low. According to data from energy services firm Baker Hughes, the number of oil rigs operating in the US fell by eight to 729, declining for the fourth week in five. Investor optimism on an extension of the Opec-led agreement following recent comments from both Opec and non-opec officials ahead of the Opec meeting in Vienna on Nov. 30 too supported the prices. Benchmark crude oil futures for December delivery ended higher by $1.10 or 2 percent at $ 55.64 a barrel on the New York Mercantile Exchange. Brent crude for January delivery was up by $1.50 to $62.12 a barrel on the ICE.


Indian rupee ended marginally higher against dollar on Friday due to fresh dollar selling by banks and exporters amid persistent capital inflows. Investors took some support with report that India's dominant services industry activity expanded at its fastest pace in four months in October as demand continued to strengthen, despite accelerating price pressures. The Nikkei India Services Purchasing Managers' Index rose to 51.7 in October from September's 50.7. Some support also came with the Finance Ministry's statement that it approved two foreign direct investment (FDI) proposals worth Rs 24.56 crore.  Besides, the dollar losing muscle against other currencies overseas along with positive trend in equity market too supported the rupee.  On the global front, dollar steadied on Friday, capping a week of mild losses, as investors waited for fresh data for evidence of more strength in the US economy and the progress of tax plans to bet on the greenback's outlook. Finally, the rupee ended at 64.55, 6 paise stronger from its previous close of 64.61 on Thursday.


The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5921.01 crore against gross selling of Rs 4383.88 crore, while in the debt segment, the gross purchase was of Rs 1215.22 crore with gross sales of Rs 605.62 crore.


The US markets extended their gains in the last session with major averages ending at record highs after the tech giant Apple came with a strong set of numbers. The Asian markets have made a somber start after China's central bank chief warned again about excessive leverage, however, the Japanese market was marginally in green as the yen tumbled to the weakest since March after Bank of Japan Governor Haruhiko Kuroda said it's crucial for inflation to exceed the 2 percent target. The Indian markets continued their bull run in the lasts session; however today the start of the new week is likely to be a bit cautious on mixed regional cues. All eyes will be on GST Council meeting, slated later during the week which is expected to consider lowering of the 28 percent GST rate on certain common use items. Traders will also be getting some support with reports that government could consider a proposal to stagger deadlines for filing of monthly returns under the Goods and Services Tax for small and large firms. The move would ensure that the rush towards the last few days gets partly dissipated and leads to lower burden on the IT systems as well that often leads to large delays in uploading of returns and invoices. There will be some action in food processing and related stocks, as the Minister for Railways and Coal Piyush Goyal has said that the categorisation of the food processing sector for bank credit should be reviewed as it could in turn help double farmers' income. There will be buzz from the primary market too, as the shares of Reliance Nippon Asset Management Company (AMC) will mark its debut on the National Stock Exchange (NSE). The IPO got tremendous response and was oversubscribed by 81.54 times.


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  • ITC has launched a new brand ‘Farmland' to mark its foray into the fresh fruits and vegetables segment.
  • Tata Motors has rolled out automated manual transmission version of its compact sedan Tigor priced up to Rs 6.22 lakh.
  • ONGC is planning to nearly double natural gas production in four years as it invests billions of dollars to produce from newer discoveries.
  •  HCL Technologies will commence its business operations at Nagpur campus in state of Maharashtra from the first week of April 2018.
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