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NSE Intra-day chart (07 August 2017)
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Market Commentary 08 August 2017
Markets to make cautious start on sluggish regional cues

Indian equity benchmarks ended the lackluster day of trade marginally in red on Monday, with frontline gauges swinging between green and red for most part of the day. Market traded near neutral lines throughout the session amid lack of any major domestic cues, but selling in dying hour of trade mainly dragged the key gauges in red terrain. Traders opted to remain on sidelines on concerns that factors such as positive earnings and hopes of an improving economy were already factored into prices. Sentiments also remained dampened on ASSOCHAM's report that with the external value of the Indian rupee superseding its internal strength despite lower inflation, the resultant mismatch and the continuing trend is hurting exporters, whose competitive edge gets directly hit with the declining value of the dollar against the domestic currency. However, losses remained capped as traders took some solace with the government's statement that rollout of goods and services tax (GST) by and large has been smooth and it has deployed a large number of senior officials to regularly review the working of the new indirect tax regime. Separately, after one month of the implementation of GST, the collections from customs duty and Integrated-GST (IGST) from imports has almost doubled to Rs 30,000 crore in July. The July collections compare to indirect tax collection of over Rs 16,000 crore of the same month of 2016. Some support also came with NITI Aayog Member Bibek Debroy's statement that it is not reasonable to connect the GST regime with slowdown in manufacturing output as the issues that the sector is facing goes beyond the tax reform. He also said that these are very temporary things which they don't need to worry about because it is a blip that will go away once the transition is complete. Finally, the BSE Sensex declined 51.74 points or 0.16% to 32,273.67, while the CNX Nifty was down by 9.00 points or 0.09% to 10,057.40.


The US markets closed higher on Monday, with the S&P 500 ending at a record and the Dow extending its streak of such closing highs to nine. The day's gains were modest but broad-based. Eight of the 11 primary S&P 500 sectors ended higher on the day, with consumer staples and technology shares leading on the day. Tech was supported by a broad rally in semiconductor stocks. On the economy front, consumer borrowing slowed a bit in June from the torrid growth in the prior month, but continued at a solid pace. Total consumer credit increased $12.4 billion in June to a record seasonally adjusted $3.86 trillion, posting an annual growth rate of 3.9%. This is down from a revised $18.3 billion gain in May, which was the strongest rate in six months. Consumer borrowing slowed a bit in the second quarter as a whole, continuing a trend in place since last fall. Credit rose at a 4.5% annual rate during the second quarter, down slightly from a 5% pace in the first quarter. The Dow Jones Industrial Average added 25.61 points or 0.12 percent to 22,118.42, the Nasdaq gained 32.21 points or 0.51 percent to 6,383.77, while the S&P 500 edged higher by 4.08 points or 0.16 percent to 2,480.91.


Crude oil futures declined on Monday, amid renewed oversupply jitters, following an uptick in US output to a two-year high. Crude futures showed little sign of a rebound, as data showed US production rose to a two-year high while a rebound in Libyan oil output also added to oversupply concerns. It was reported that in Libya, Output at the Sharara field, the country's largest oil field, was returning to normal after a brief disruption by armed protesters in the coastal city of Zawiya. Benchmark crude oil futures for September delivery declined by $0.19 or 0.3 percent to $48.39 on the New York Mercantile Exchange. In London, Brent crude for September delivery ended lower by $0.11 at $52.31 a barrel on the ICE.


Snapping its four-day winning streak, Indian rupee ended considerably weaker against dollar on Monday due to demand for greenback by banks and importers. Sentiments also remained dampened on ASSOCHAM's report that with the external value of the Indian rupee superseding its internal strength despite lower inflation, the resultant mismatch and the continuing trend is hurting exporters, whose competitive edge gets directly hit with the declining value of the dollar against the domestic currency. Moreover, the dollar's gains against some currencies overseas on strong jobs data put the rupee on back-foot. Finally, the rupee ended at 63.80, 23 paise weaker from its previous close of 63.57 on Friday.


The FIIs as per Monday'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 4321.80 crore against gross selling of Rs 5190.50 crore, while in the debt segment, the gross purchase was of Rs 2048.87 crore with gross sales of Rs 533.54 crore.


The US markets closed higher in the last session, with the Dow climbing to a new record closing high for the ninth consecutive session.  The gains reflected ongoing positive sentiment following last Friday's upbeat monthly jobs report. The Asian markets have made a mixed start, though some indices are still trading near their 2007 high, while Korea and Japan reversed their earlier gains. The Indian markets after dilly-dallying throughout the day ended in red in the last session. The major laggards were IT and tech stocks on news that Cognizant Technology Solutions is on a downsizing spree. Today, the start is likely to remain somber on muted global cues. Markets though will be getting some support with Central Board of Direct Taxes (CBDT) report of a 25 percent increase in the number of Income Tax Returns (ITRs) filed in the current fiscal, on the backdrop of economic reform, including demonetisation and the Income Tax Department`s (ITD) Operation Clean Money. There will also be some buzz in the markets with Sebi allowing brokers to offer a margin funding facility that does not mandate clients to bring cash upfront to initiate a leveraged trade. Investors can now buy shares by pledging their stock portfolio with stock brokers. There coal and mining sector stocks will be buzzing, as the government has annulled the fifth round of coal mines auction due to poor response from bidders. The tyre stocks too will be in action, as the government may impose anti-dumping duty of up to $452.33 per tonne on a certain variety of Chinese pneumatic radial tyres to guard domestic players from cheap imports. There will be lots of important earnings announcements too, to keep the markets ticking.


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  • Wipro has announced the availability of Data Discovery Platform, its big data analytics-as-a-service solution on Microsoft Azure.
  • Coal India's arm - Central Coalfields has received an approval for expansion of its Konar open cast mine and the setting up of a non-coking coal washery in Jharkhand's Bokaro district at a cost of Rs 1538 crore.
  • Indian Oil Corporation has launched 5-kg Free Trade LPG in Hyderabad to provide easy access to LPG connections to the migrant workforce.
  • Tata Motors' subsidiary -- Jaguar Land Rover has reported retail sales of 46,074 units for July, up 3.6 per cent from the same month last year.
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