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NSE Intra-day chart (06 August 2018)
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Market Commentary 07 August 2018
Markets to make slightly green start


Indian equity benchmarks ended the Monday's trade at new all-time closing high levels, though key indices lost some sheen in the last hour of trade to end off day's high. Markets started the session on an optimistic note with, as sentiments remained up-beat with the Confederation of Indian Industry's (CII) statement that with the US imposing an additional 25% duty on imports worth $34 billion from China, certain Indian products may become more competitive. Traders also took note of Principal Economic Adviser to the Finance Ministry, Sanjeev Sanyal's statement that the Goods and Services Tax (GST) slabs may come down to three in addition to the exempted category, in the long-term. He also said the three slabs could be a low of 5%, a central 15% (merging the 12% and 18% slabs that exist now) and a top rate of 25%. Sentiments on the street also remained optimistic with a report showing that foreign investors have poured in over Rs 2,300 crore in the Indian capital markets in July, after pulling out funds for three months in a row. Meanwhile, Central government suggested that there is a need to pause on rate cuts for the time being due to the shortfall of over Rs 40,000 crore in GST collection. However, traders booked some of their gains in last leg of trade which pull market off from day's high, as street got cautious, as the government said it will take action against over 2.25 lakh companies as they have not filed requisite financial statement for 2015-16 and 2016-17. Anxiety also spread with credit rating agency, Care Ratings' latest report that the monsoon deficit is likely to lead to lower production. The report further noted that the country is still facing a rainfall deficit of 7%, on a cumulative basis and the overall sown area is 7.5% less than last year. Despite some profit booking, markets managed to end at record closing highs, as market participants reacted positively to a report that the GST Council headed by Finance Minister Piyush Goyal approved setting up of a group of ministers (GoM) to tackle taxation related issues faced by micro, small and medium enterprises (MSMEs). Finally, the BSE Sensex soared 135.73 points or 0.36% to 37,691.89, while the CNX Nifty was up by 26.30 points or 0.23% to 11,387.10.


The US markets ended higher on Monday, as investors continued to weigh solid earnings against repercussions of retaliatory tariffs from trading partners and their impact on markets. The positive surprises in the earnings season are strong and that's helping the overall sentiment in the market. The biggest take away from this earnings season is that tax cuts were clearly a positive for the bottom line but the top line has also been good. Investors came into this earnings season with high hopes, as street had forecast year-over-year profits to grow by 20 percent in the second quarter. So far, second-quarter earnings have grown by 24 percent through Friday. Besides, Technology and consumer discretionary stocks led the gains. Facebook rose on reports that the social media giant is in talks with banks to incorporate users' financial information into Messenger. However, trade-related worries lingered as the US continued to clash with its global counterparts over tariffs. Last week, China announced tariffs on $60 billion of US products in response to the US' planned 25% tariffs on $200 billion of Chinese imports. On Sunday, President Donald Trump stated that tariffs are working big time. Dow Jones Industrial Average surged 39.60 points or 0.16 percent to 25502.18, the S&P 500 gained 10.05 points or 0.35 percent to 2850.40 and Nasdaq was up by 47.66 points or 0.61 percent to 7859.68.


Crude oil futures ended higher on Monday, on account of a pair of factors that threaten to disrupt near-term supplies - bullish developments for futures. Besides, reports indicated that Saudi crude production dropped to around 10.3 million barrels a day in July, down from 10.49 million barrels a day in June, according to delegates from the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the de facto head. Meanwhile, President Donald Trump's administration on its vow to reimpose sanctions on Iran, after the White House in May pulled the US out of a 2015 international agreement to curb Iran's nuclear program. Market participants estimated that sanctions, with some coming on line at midnight Tuesday and others being put in place over the next three months, could block more than 1 million barrels a day of Iran's roughly 2.5 million barrels a day of crude exports. Benchmark crude oil futures for September gained 52 cents or 0.8 percent to settle at $69.01 a barrel on the New York Mercantile Exchange. October Brent crude rose 54 cents or 0.7 percent at $73.75 a barrel on London's Intercontinental Exchange.


Indian rupee weakened considerably against dollar on Monday, due to fresh demand for American currency from banks and importers. The rupee sentiment was hit with credit rating agency, Care Ratings' latest report stated that the monsoon deficit is likely to lead to lower production. The report further noted that the country is still facing a rainfall deficit of 7%, on a cumulative basis and the overall sown area is 7.5% less than last year. The domestic currency was also weighed down by dollar's strengthen against some other currencies overseas. Traders failed to get relief with the Confederation of Indian Industry's (CII) statement that with the US imposing an additional 25% duty on imports worth $34 billion from China, certain Indian products may become more competitive. On the global front, dollar edged towards a one-year high on Monday, as trade war rhetoric between the United States and its trading partners helped the US currency. Finally, the rupee ended at 68.88, 27 paise weaker from its previous close of 68.61 on Friday.


The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5187.48 crore against gross selling of Rs 4780.44 crore, while in the debt segment, the gross purchase was of Rs 1069.26 crore with gross sales of Rs 902.41 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.75 crore against gross selling of Rs 4.75 crore.


The US markets ended higher Monday, as investors continued to focus on healthy corporate earnings, instead of the escalating trade threats the US and China made last week. Asian markets were trading mostly in green on Tuesday, following positive Wall Street lead, but gains remained capped with worries over the US-China trade conflict. Indian equity markets ended at record closing highs on Monday, extending rally to a second consecutive session, owing to healthy buying in select bank, auto, metal and energy stocks, amid mixed global cues. Today, the markets are likely to make flat-to-positive start, amid firm global cues. Traders will be getting encouragement with rating agency ICRA's report that revenues of Indian corporates have grown by 22% in the June quarter from a year ago. It added that the increase in revenues has been attributed to the strong growth in both consumer-based industries such as consumer goods, and auto; and commodity sectors such as cement, iron, steel, and oil and gas. Traders may took note of a report that the government will set up a group of ministers (GoM) to look into issues related to the proposed mega free trade agreement the Regional Comprehensive Economic Partnership (RCEP). However, there will be some cautiousness with president of the International Economic Association, and former chief economist at the World Bank, Kaushik Basu's statement that in the event of US-China currency war there will be a sideline effect on India and a depreciation of the rupee, which, if managed well by policymakers, will be good for the country. There will be some buzz in the steel sector stocks with India Ratings and Research's (Ind-Ra) statement that there is a moderate risk of global trade war with domino effect due to US trade restrictions on steel imports but rebounding steel margins could help domestic steel companies withstand the challenges. There also will be buzz in the auto component sector stocks with report that auto component industry sought uniform 18 percent Goods and Services Tax (GST) across the sector stating that low taxation would lead to better compliance and larger tax base.


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Tata Motors






  • IOC is planning to invest Rs 1.75 lakh crore to nearly double refinery capacity, boost petrochemical production, expand gas business and lay new pipelines. 
  • Maruti Suzuki India has maintained double-digit sales growth forecast for 2018-19, despite a marginal decline in July, on the back of good monsoon and uptick in rural market to drive demand. 
  • Tech Mahindra is planning to launch about five pilot projects on 5G services by September and execute big projects on the new generation network from next financial year onwards. 
  • L&T's construction arm -- L&T Construction -- has won orders worth Rs 1,296 crore across various business segments.
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