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NSE Intra-day chart (05 December 2017)
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Market Commentary 06 December 2017
Markets to make a soft start of the crucial day

Indian equity benchmarks ended the Tuesday's trade with marginal losses as traders remained on the sidelines ahead of the outcome of two-day policy review by the Reserve Bank of India (RBI) beginning today. The RBI is likely to keep the key rate unchanged on Wednesday and stay focused on inflation control as the rebound in September quarter GDP growth. Markets started the session on pessimistic note, as sentiments remained dampened after global rating agency Fitch Ratings pared India's growth forecast for this financial year to 6.7% from 6.9% estimated earlier citing lower than expected recovery in the second quarter. For 2018-19, the credit rating agency has cut the forecast to 7.3% from 7.4% earlier. Sentiments also weighed down with India's services sector growth losing momentum in the month of November, as sustained pain from the country's Goods and Services Tax (GST) regime triggered significant decline in demand and lower customer turnout. The seasonally adjusted Nikkei Services Business Activity Index fell to 48.5 in the month of November from 51.7 in the month of October. The Nikkei India Composite PMI Output Index, which measures both manufacturing and services, was also down to 50.3 in November from 51.3 in October. However, recovery in final hour of trade helped markets to pare most of their early losses and end only with marginal cut, as traders drew some solace on report that Finance Secretary Hasmukh Adhia has called a meeting of tax officials from the Centre and States on December 9, to assess the trend in revenue collections from the GST and review measures to further boost compliance. Finally, the BSE Sensex declined 67.28 points or 0.20% to 32,802.44, while the CNX Nifty was down by 9.50 points or 0.09% to 10,118.25.


The US markets closed lower on Tuesday, driven by losses in utilities, telecoms and industrials sectors. An earlier rebound in the technology sector fizzled out, sending the Nasdaq Composite into negative territory, reversing solid gains in the morning. Republicans in US House of Representatives began staking out their positions on final tax legislation, days ahead of talks with the Senate to shape the tax package lawmakers hope to send to President Donald Trump by year end. Separately, Federal Reserve Governor Jerome Powell, facing a Senate committee vote on his nomination to become the central bank's chairman, won strong bipartisan support that suggests he'll sail through the full Senate. On the economy front, the US trade deficit in October jumped 8.6% to a ninth-month high of $48.7 billion from $44.9 billion. Imports climbed 1.6% to a record $244.6 billion. Exports were unchanged at $195.9 billion. OPEC was a big winner. Nearly half of the increase in the US trade deficit was tied to larger imports of petroleum at higher prices. The average cost of a barrel of oil rose to a more than two-year high of $47.26. The Dow Jones Industrial Average lost 109.41 points or 0.45 percent to 24,180.64, the Nasdaq dropped 13.153 points or 0.19 percent to 6,762.21, and the S&P 500 edged lower by 9.87 points or 0.37 percent to 2,629.57. 


Crude oil futures made some recovery on Tuesday ahead of U.S. inventories data and on market participants continued expectation of ongoing strong OPEC compliance with the production-cut deal, stoking investor hopes that rebalancing in oil markets would continue through 2018. There was a report that OPEC oil output fell in November by 300,000 barrels per day (bpd) to its lowest since May. Benchmark crude oil futures for January delivery ended higher by $0.15 or 0.3 percent at $57.62 a barrel on the New York Mercantile Exchange. Brent crude for February delivery was up by 0.45 cents to $62.90 a barrel on the ICE.


In line with equity market, the Indian rupee ended marginally lower against US dollar on Tuesday, due to fresh demand for the American currency from banks and importers. Traders' attention turned towards the outcome of two-day policy review by the Reserve Bank of India (RBI) beginning today. Sentiments remained dampened after global rating agency Fitch Ratings pared India's growth forecast for this financial year to 6.7% from 6.9% estimated earlier citing lower than expected recovery in the second quarter. For 2018-19, the credit rating agency has cut the forecast to 7.3% from 7.4% earlier. On the global front, dollar dipped against euro on Tuesday, as investors waited to see how the next step of the US tax reform legislation proceeds rather than extend the rise made by the dollar at the start of the week following the US Senate's approval of the tax Bill. Finally, the rupee ended at 64.38, 1 paise weaker from its previous close of 64.37 on Monday.


The FIIs as per Tuesday'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 4259.38 crore against gross selling of Rs 4255.53 crore, while in the debt segment, the gross purchase was of Rs 876.14 crore with gross sales of Rs 884.31 crore.


The US markets ended in red in a late hour sell-off and the Dow pulled back off the record closing high set in the previous session. There were concerns about the outlook for the Republican tax reform bill amid reports about disagreements over a corporate alternative minimum tax. The Asian markets have made mostly a soft start led by the Japanese market which is down by around a percent as commodities companies led declines following a rout in copper prices and as investors assessed the impact of proposed tax cuts. The Indian markets despite showing some recovery in the late hours ended marginally in red in the last session, traders remained concerned about the rising fiscal deficit. Today, the start of the important day is likely to remain soft on weak global cues and all eyes will be on RBI monetary policy outcome later today, after a two-day policy meeting, the RBI is widely expected to keep its policy rate on hold, citing concerns about inflation and fiscal deficit. There will be some concern with report that public debt of the central government rose by 2.53 per cent to Rs. 65.65 lakh crore in the July-September quarter compared to the previous quarter. Internal debt constituted 93 per cent of public debt at end-September 2017, while marketable securities accounted for 82.6 per cent of public debt. Meanwhile, the newly-constituted 15th Finance Commission held its first meeting and decided to involve think-tanks in drawing up its report that will primarily deal with devolution of revenue between the Centre and states. The exporters will see some action as part of its mid-term review of the foreign trade policy (FTP) for 2015-20; the government has announced fresh incentives worth Rs 8,450 crore a year to exporters. The revised FTP provides for across the board increase of 2 percent in existing Merchandise Exports from India Scheme (MEIS) for exports by MSMEs/labour intensive industries, involving additional outgo of Rs 4,567 crore.


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  • TCS has entered into a new partnership with Cornell Tech to collaborate on technology research and expand K-12 digital literacy programs in New York City.
  • Tata Motors has trimmed prices of its passenger cars to clear year-end inventory.
  • SBI has inaugurated four wealth management hubs in Hyderabad.
  • HCL Technologies has entered into a strategic partnership with Siemens on Industry 4.0 solutions, with a strategic collaboration on the Siemens Industry Software Suite.
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