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NSE Intra-day chart (06 December 2017)
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Market Commentary 07 December 2017
Markets may see some recovery on positive Asian cues

Indian equity benchmarks ended the Wednesday's trade in red terrain as Reserve Bank of India (RBI) decided to keep the policy repo rate unchanged. Sentiments remained downbeat since morning as markets after a negative start never looked confidant and extended their southward journey to end below their crucial 32,600 (Sensex) and 10,050 (Nifty) levels. Traders remained concerned with report that public debt of the central government rose by 2.53% to Rs 65.65 lakh crore in the July-September quarter compared to the previous quarter. Internal debt constituted 93% of public debt at end-September 2017, while marketable securities accounted for 82.6% 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. Markets extended southward journey after RBI's Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.0% but has raised the inflation forecast for remainder of the current financial year to 4.3-4.7%. The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth. Sentiments also remained dampened on reports that India's economy though showed signs of recovery in Q2FY18 but overall business sentiment in the country during the same period got hit by the new Goods and Services Tax (GST) regime. As per the National Council of Applied Economic Research's (NCAER) latest survey, its Business Confidence Index (BCI) fell 12.9% from the earlier quarter and 11.1% on year-on-year basis, due to GST. Finally, the BSE Sensex declined 205.26 points or 0.63% to 32,597.18, while the CNX Nifty was down by 74.15 points or 0.73% to 10,044.10.


The US markets closed mostly lower on Wednesday, as weakness in the energy sector spurred some minor selling that offset a recovery in the technology sector. The S&P 500 ended essentially unchanged on the day, although it closed in slightly negative territory. That made for its fourth straight lower close, its longest losing streak since March. Also in focus was the prospect of a US government shutdown. Federal government operations are funded through Friday, and would partially shut down if there's no deal by politicians to extend funding. President Donald Trump again raised the possibility of a US government shutdown - blaming Democrats for that possible outcome - one day before he is due to host Republican and Democratic congressional leaders for talks on spending bills. On the economy front, private-sector employment slowed down in November, as employers added 190,000 jobs. According to Automatic Data Processing Inc. (ADP), small private-sector businesses added 50,000 jobs in November, midsize businesses added 99,000, and large businesses added 41,000. Most of those gains were in the service sector - 155,000 jobs added there, compared with 36,000 for goods producers. The Dow Jones Industrial Average lost 39.73 points or 0.16 percent to 24,140.91, the S&P 500 edged lower by 0.3 points or 0.01 percent to 2,629.27, while the Nasdaq added 14.162 points or 0.21 percent to 6,776.38. 


Crude oil futures once again declined on Wednesday after official data confirmed a huge build in US gasoline supplies, offsetting the data showing crude stockpiles fell for the third straight week. Energy Information Agency (EIA) inventory report showed crude stockpiles fell more-than-estimated, Crude inventories fell 5.6 million barrels (bbl) in the week to Dec. 1. Gasoline inventories rose by 6.8 million barrels, while supplies of distillate rose by about 1.7 million barrels. Benchmark crude oil futures for January delivery ended lower by $1.66 or 2.88 percent at $55.96 a barrel on the New York Mercantile Exchange. Brent crude for February delivery was down by 2.6 percent to $62.90 a barrel on the ICE.


Falling for the second consecutive session, Indian rupee depreciated against dollar on Wednesday, on increased demand for the US currency from importers. The domestic currency came under pressure as the RBI left key policy repo rate unchanged at 6%. Likewise, it has left the reverse repo rate at 5.75%, while the cash reserve ratio too has been left unchanged at 4%. Some concern also came with report that India's total public debt (excluding liabilities under the public account) increased to Rs 65.65 lakh crore in the July-September quarter (Q2FY18), up by 2.53% over the previous quarter. Besides, losses in domestic equities too affected the rupee, but dollar's weakness against some currencies overseas kept the fall to a minimum. On the global front, dollar was steady against a basket of the other major currencies on Wednesday as concerns over a possible US government shutdown offset optimism over progress on tax reform. Finally, the rupee ended at 64.51, 13 paise weaker from its previous close of 64.38 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 3752.07 crore against gross selling of Rs 5155.17 crore, while in the debt segment, the gross purchase was of Rs 1892.57 crore with gross sales of Rs 743.39 crore.


The US markets once again made a mixed closing in the last session and the major averages spent the day bouncing back and forth across the unchanged line, as traders expressed uncertainty about the economic impact of the Republican tax reform plan. The Asian markets have made mostly a positive start bouncing back from their longest losing streak as the recent rout in global stocks abated. The Japanese market was up by over a percent as the yen weakened. The Indian markets slumped in the last session after the RBI maintained status quo in its policy review; traders were concerned about it raising the inflation estimate to 4.3-4.7 percent, from the earlier projection of 4.2-4.6 percent, for the second half of the current financial year.  However it retained the growth forecast at 6.7 percent for 2017-18 even through the gross value added (GVA) in the second quarter rose to 6.3 percent. Today, the start is likely to see some recovery on positive regional cues and traders will be analyzing the policy outlook of the RBI where it sounded confident of the economy achieving its previous growth estimate of 6.7 per cent on a gross value-added basis, with risks evenly balanced. Marketmen will also be getting some support with former Reserve Bank of India Governor YV Reddy's statement that amid uncertainties in the global economic order, a sense of optimism about the future is more in India than in other parts of the world. Meanwhile, at a meeting with Finance Minister Arun Jaitley in the run-up to the last full-year Budget of the NDA government before 2019 general elections, India Inc. has sought lower tax and more incentives for investments while exporters called for quicker GST refunds.


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Reliance Industries















  • Maruti Suzuki India has reported 8.04% rise in its production to 1,55,568 units in November 2017, as compared to 1,43,989 units in November 2016.
  • Bharti Airtel has entered into a partnership with Intex Technologies to launch a range of affordable 4G smartphones with advanced features.
  • Tata Motors' subsidiary -- JLR has launched a limited edition variant of Range Rover with price starting at Rs 2.8 crore.
  • Yes Bank has collaborated with Moody's Analytics to provide credit certification to its Credit Management employees.
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