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NSE Intra-day chart (05 May 2017)
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Market Commentary 08 May 2017
Markets to see recovery with a positive start

A session after showcasing large gains of over half a percent, Indian equity indices faltered and failed to extend the winning momentum on Friday. The benchmark indices suffered hefty bouts of profit booking especially in commodities related counters and got dragged below the psychological 9,300 (Nifty) and 29,900 (Sensex) levels. Besides, a selloff in banking shares after the President Pranab Mukherjee okayed the ordinance on non-performing assets, concerns over French elections on Sunday and mixed global earnings have also hit the sentiment hard. The ordinance promulgated by the government on bad loans has now empowered the Reserve Bank of India to issue directions to banks for resolution of stressed assets. Market participants remained cautious ahead of the Goods and Services Tax (GST) Council meeting, scheduled on May 18-19, to finalise the rates of different commodities and services. It will also approve rates of remaining items. Investors failed to get any sense of relief with Confederation of Indian Industry (CII) President Shobana Kamineni's statement that India can achieve a gross domestic product (GDP) growth of 10 percent by fiscal year 2019-20 on the back of tremendous opportunities available in the economy. Furthermore, Economic Affairs Secretary Shaktikanta Das said Indian economy will grow 8% next fiscal as the full-year impact of the landmark GST will be seen by that time. The GST, dubbed as the biggest tax reform since independence, will club nearly a dozen central and state levies into a single national sales tax, helping the country integrate into one market. Meanwhile, the gold and jewellery stocks gained traction on report that the uptake for gold in India for January-March this year was 124 tonnes, up 15% compared with the overall demand for the same period in 2016. Finally, the BSE Sensex decreased 267.41 points or 0.89% to 29858.80, while the CNX Nifty was down by 74.60 points or 0.80% to 9,285.30. 


The US markets coming out of their consolidation mood surged on Friday after getting an upbeat jobs data, with the Nasdaq and the S&P 500 reaching new record closing highs. The Labor Department's closely watched monthly jobs report showed stronger than expected job growth in the month of April. As per the report, non-farm payroll employment jumped by 211,000 jobs in April after climbing by a downwardly revised 79,000 jobs in March. With the stronger than expected job growth, the unemployment rate edged down to 4.4 percent in April from 4.5 percent in March, its lowest level since a matching rate in May of 2007. The report also said the annual rate of growth in average hourly employee earnings slowed to 2.5 percent in April from 2.6 percent in March. In other economy news, Consumer credit in the U.S. increased by more than expected in the month of March. Federal Reserve in its report said that consumer credit jumped by $16.4 billion in March after climbing by $13.8 billion in February. Non-revolving credit such as student loans and car loans surged up by $14.5 billion in March after rising by $12.1 billion in February. The Fed said consumer credit increased by an annual rate of 5.2 percent in March, as revolving and non-revolving credit climbed by 2.4 percent and 6.2 percent, respectively. The Dow Jones Industrial Average was up by 55.47 points or 0.26 percent to 21,006.94, the Nasdaq added 25.42 points or 0.42 percent to 6,100.76 and the S&P 500 ended up by 9.77 points or 0.41 percent to 2,399.29.


Crude oil futures showed some recovery in the last session mainly on bargain hunting after plunging to their lowest of the year in the previous session. Prices were also supported by news that Saudi oil export loadings fell by more than 670,000 barrels a day in April. Saudi Arabia also said it supports the idea of extending the supply-cut agreement beyond June. Traders however overlooked report that the number of active US drilling rigs rose for the sixteenth straight week. U.S. energy firms added oil rigs for a 16th week in a row. Oilfield services firm Baker Hughes reported its weekly U.S. rig count rose by 6 to 703. Benchmark crude oil futures for June delivery ended up by $0.60 to $ 46.12 on the New York Mercantile Exchange. In London, Brent crude for June delivery ended higher by $ 0.81 at $49.17 on the ICE.


Indian rupee extended its weakness for the second straight day against dollar on Friday due to increased demand for American currency from banks and importers, tracking losses in the Asian currencies market. Besides, firm dollar against some global currencies overseas and massive losses of domestic equity markets too kept home currency under intense pressure. On the global front, dollar fell to a six-month low against euro on Friday as investors took a cautious approach ahead of the French election and the latest U.S. jobs data. Finally, the rupee ended at 64.37, 20 paise weaker from its previous close of 64.17 on Thursday.


The FIIs as per Friday'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 6023.42 crore against gross selling of Rs 6163.58 crore, while in the debt segment, the gross purchase was of Rs 975.54 crore with gross sales of Rs 228.60 crore.


The US markets moved higher in the last session on getting upbeat jobs data and also as the oil rebounded from its series of fall. The Asian markets have made mostly a positive start following Emmanuel Macron's victory as France's next president. The Japanese market has taken the lead coming after a three day holiday, while the Chinese market was still in somber mood. The Indian markets suffered sharp profit taking in the last session. The mood remained cautious ahead of the French election results and traders opted to take profit ahead of the big event. Today, the start is likely to be in green tracking the regional peers after Emmanuel Macron's victory in the French presidential election signaled a "new beginning for Europe." Traders will also be getting some support with Finance Minister Arun Jaitley ruling out any surprises in the tax rates in the Goods and Services Tax (GST) that is proposed to be rolled out on July 1 and also asserting that there will be no cascading in goods and commodities, which can even see tax rates coming down a little. The minister also ruled out the possibility of levying tax on agriculture. Meanwhile, India has urged the Asian Development Bank (ADB) to reduce the time it takes to approve a loan as well as to disburse as the developing countries in the Asian region need to build their infrastructure and increase social sector spending. Also, there will be some cautiousness too, as Vice-Chairman, NITI Aayog Arvind Panagariya has said that only genuine farm income must be exempt from tax. He added that "we are only looking to find ways to stop the camouflaging of the income earned from sources other than agriculture as agricultural income". There will be lots of earnings reaction to keep the markets in action, while there will be some buzz from the primary market too, as state-owned Housing and Urban Development Corporation Ltd (HUDCO) is coming with its Rs. 1,200-crore initial public offer (IPO), through which the government will divest 10 per cent stake in the company.


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Tata Motors






  • ONGC's overseas arm - ONGC Videsh has found hydrocarbon reserves in its Mariposa-1 well, which is under drilling in CPO-5 block of Colombia.
  • Yes Bank has entered into a strategic partnership with Emirates NBD for its Global Indian Banking programme.
  • Tata Motors' subsidiary -- Jaguar Land Rover has reported a 2.3% fall in April retail sales at 40,385 vehicles.
  • Reliance Industries will sell the natural gas it produces from coal seams in Madhya Pradesh to its own units in Gujarat and Maharashtra at $4.23 per million British thermal units.
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