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NSE Intra-day chart (06 May 2019)
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Market Commentary 07 May 2019
Benchmarks to make a cautious start amid mixed global cues


Indian equity markets remained under bears' grip on Monday, with Sensex and Nifty closing lower by around a percent each. Key indices made a negative start of the day, amid reports that in a first in recent history of tax filings, income tax e-filings in FY2019 have dropped. Income tax e-filings in FY 2018-19 was 6.68 crore, down from 6.74 crore in the previous fiscal. This is surprising given that post demonetisation it was expected that the tax base would continue to increase. Adding more anxiety among market participants, India's services sector fell for the second consecutive month in April, with rates of new business and output growth both cooling to seven-month lows. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index eased to 51 in April from 52 in March. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- also slipped to 51.7 in April as against 52.7 in March. Weakness persisted in the markets during the whole day, on the back of weak cues from global markets. The street paid no heed towards reports that with a view to facilitate fundraising by start-ups, the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed relaxation in the income tax laws pertaining to sale of residential properties and carrying forward of losses. Traders even overlooked the Reserve Bank of India's (RBI) data showing that the country's foreign exchange reserves soared by $4.368 billion to $418.515 billion in the week to April 26, helped by the second dollar-rupee swap auction. In the swap auction conducted on April 23, the RBI had received bids worth $18.65 billion against $5 billion on offer. It accepted just five bids worth $5 billion. Finally, the BSE Sensex slipped 362.92 points or 0.93% to 38,600.34, while the CNX Nifty was down by 114.00 points or 0.97% to 11,598.25.


The US markets ended lower on Monday after President Donald Trump threatened to impose tariffs on all Chinese imports. Trump said tariffs on $200 billion worth of Chinese goods would be increased to 25 percent on Friday and threatened to impose tariffs on the remaining $325 billion worth of Chinese goods shortly. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. The 10 percent tariff had been scheduled to rise to 25 percent at the end of last year, but the increase was delayed due to ongoing trade talks. Trump claimed the tariffs being paid by China for the past several months are partially responsible for our great economic results. Though, trade negotiations were set to resume this week between the two countries and last week US officials had seemed hopeful a deal was imminent. The Chinese team still planned to go to Washington for talks, which are due to restart on Wednesday, with some hopeful for a deal as soon as Friday. In scrip specific development, shares of Kraft Heinz Company rose 0.6%, shrugging off reports that the food company will have to restate the financial statements in its annual reports for 2016 and 2017, and for each quarterly period for the first nine months of 2018, as it continues to investigate certain misstatements. Dow Jones Industrial Average dropped 66.47 points or 0.25 percent to 26438.48, Nasdaq declined 40.71 points or 0.50 percent to 8123.29 and S&P 500 was down by 13.17 points or 0.45 percent to 2932.47.


Crude oil futures ended higher on Monday as concerns surrounding US-China trade talks eased and tensions in the Middle East climbed. China's Foreign Ministry spokesman Geng Shuang said that China is still preparing to send a delegation to Washington for trade talks despite Trump's threat to raise tariffs. Besides, there has been a report of a powerful explosion in Saudi Arabia's port city of Yanbu, a key petroleum shipping terminal for the Saudis. The US also sent bombers and a carrier group to the region over the weekend, amid reports US forces in that area may have been targeted for an attack by Iran or a proxy force. Benchmark crude oil futures for June gained 31 cents or 0.5 percent to settle at $62.25 a barrel on the New York Mercantile Exchange. July Brent crude rose 39 cents or 0.6 percent to settle at $71.24 a barrel on London's Intercontinental Exchange.


Snapping its four-day winning streak, Indian rupee ended weaker against dollar on Monday as demand for the American unit from importers and banks picked up. Sentiments turned pessimistic with a private survey showing that India's services sector expanded at its slowest pace in seven months in April as some businesses postponed decisions and expansion plans until seeing results of the general election currently under way. The Nikkei/IHS Markit Services Purchasing Managers' Index slipped to 51.0 in April, the lowest since September, down from 52.0 the previous month. Strength in dollar against major rival currencies, foreign fund outflows and heavy selling in domestic equities also kept pressure on the Indian rupee. However, easing crude prices helped in restricting the slide in the Indian unit to some extent. On the global front, safe-haven yen climbed on Monday after U.S. President Donald Trump threatened to raise tariffs on China, sending stocks and commodities into a tailspin. Finally, the rupee ended at 69.40, 18 paise weaker from its previous close of 69.22 on Friday.


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 4377.25 crore against gross selling of Rs 4467.01 crore, while in the debt segment, the gross purchase was of Rs 483.21 crore with gross sales of Rs 4837.21 crore. Besides, in the hybrid segment, the gross buying was of Rs 35.07 crore against gross selling of Rs 34.60 crore.


The US markets ended lower on Monday after President Donald Trump threatened to impose tariffs on all Chinese imports. Asian markets are trading mixed on Tuesday after US President Donald Trump's threat to raise tariffs re-ignited worries about US-China trade tensions. Indian markets extended their losing streak for fourth straight session and ended with cut of around a percent on Monday after survey data from IHS Markit showed that India's private sector expanded at the slowest pace in seven months in April amid softer growth in services activity. Today, the markets are likely to make a cautious start following mixed global cues amid trade concerns. US President Donald Trump's top trade negotiator said Washington plans to proceed with a tariff hike on Chinese goods on Friday. There will be some cautiousness with report that while the tax department's e-filing website showed returns filed in 2018-19 fell to 6.68 crore from 6.74 crore in the previous fiscal, the Central Board of Direct Taxes (CBDT) in a statement clarified that the returns filed included those of previous assessment years, excluding which returns filed in 2018-19 showed an almost 19 per cent rise. But the tax department had in the past taken returns filed in a fiscal year as a composite number to show a year-on-year increase. However, traders may get some support later in the day with a private report that if the BJP-led National Democratic Alliance (NDA) gets a second term, it will provide liquidity support to non-banking financial companies (NBFCs) that are facing cash crunch for a year now. There will be some buzz in the power sector stocks with rating agency Crisil's report that total debt of state-owned discoms is set to increase to pre-Uday levels of Rs 2.6 trillion by the end of this fiscal year, as many states have limited fiscal headroom to continue to support them. The report noted that improvement in operations may face challenges because the focus on new rural connections without adequate tariff hikes can increase losses. There will be lots of earnings reaction based on the performance of the companies to keep the markets buzzing.


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  • Tata Motors is likely to phase out small diesel cars from its portfolio as demand is expected to slow down due to upcoming BS-VI emission norms. 
  • Dr. Reddy's Laboratories has launched Testosterone Gel 1.62%, a therapeutic equivalent generic version of AndroGel 1.62%, approved by the USFDA. 
  • The Union Environment Ministry has given the environment clearance to ONGC for six development wells in five mining lease blocks in Jorhat and Golghat districts, Assam. 
  • ITC is planning to expand its dairy beverages portfolio to the rest of the country by the next summer and is eyeing a 5-10% market share in the first year of operations.
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