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NSE Intra-day chart (08 May 2017)
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Market Commentary 09 May 2017
Markets to make a flat-to-cautious start

Indian stock markets witnessed a fairly stable day of trade on Monday, as investors' sentiments around the globe turned optimistic after Emmanuel Macron was elected French president with a business-friendly vision of European integration, defeating Marine Le Pen, a far-right nationalist who threatened to take France out of the European Union. On the domestic front, sentiments got a boost after Finance Minister Arun Jaitley ruled out any surprises in the tax rates in the Goods & Services Tax (GST) that is proposed to be rolled out on July 1 and also assured that there will be no cascading in goods and commodities, which can even see tax rates coming down a little. The finance minister chaired GST council is scheduled to finalise and approve the rates of different commodities and services on May 18-19. Adding the optimism among investors, Economic Affairs Secretary Shaktikanta Das said the soon to be rolled out GST regime will help the country to grow close to 8 percent in next fiscal 2018-19. He also stated that the GST will club nearly a dozen central and state levies into a single national sales tax, helping the country integrate into one market. Some support also came with the report that India is planning to revamp its foreign trade policy and relook at incentives to give a leg up to the export sector, which is hurt by lower global demand as well as an appreciating rupee. The government proposes to come out with a mid-term review of the Foreign Trade Policy (FTP) 2015-20 in September. However, gains remained capped with the report that India's FDI inflow momentum may slow down this year and exports too may not revive with 'full gusto' as domestic bottlenecks remain. Finally, the BSE Sensex gained 67.35 points or 0.23% to 29926.15, while the CNX Nifty was up by 28.75 points or 0.31% to 9,314.05. 


The US markets just after a day of surge, consolidated again on Monday and made a flat closing after a lackluster day of trade, though the Nasdaq and the S&P 500 inched up to new record closing highs. Traders digested news of pro-European centrist Emmanuel Macron's victory in the French presidential election over the weekend. After winning the election with some 66 percent of the vote, Macron vowed to heal the social divisions exposed by France's acrimonious election campaign. On the domestic front lack of major U.S. economic data kept some traders on the sidelines. Meanwhile, Wall Street's "fear gauge" dropped to its lowest in over two decades. The CBOE Volatility index dropped 0.8 point to close at 9.77, its lowest since 1993 as investors took comfort from Macron's victory, as well as from strong quarterly reports in recent weeks. The Dow Jones Industrial Average was up by 5.34 points or 0.03 percent to 21,012.28, the Nasdaq added 1.90 points or 0.03 percent to 6,102.66 and the S&P 500 was tad higher by 0.09 points to 2,399.38.


Crude oil futures moved higher on Monday, after Russia and Saudi Arabia supported the idea of extending the supply-cut agreement into 2018 to drain the glut in supply. Russian energy Minister Alexander Novak said on Monday, that a production cut extension for a longer period will help “speed up” market rebalancing. OPEC is expected to decide at talks on May 25 whether to extend the current deal to cut production for additional six-months to the end of the year. Also, there were reports that Saudi oil export loadings fell by more than 670,000 barrels a day in April prompted some buying interest by mid-day. Benchmark crude oil futures for June delivery ended up by $0.21 to $ 46.43 on the New York Mercantile Exchange. In London, Brent crude for June delivery ended higher by $ 0.30 at $49.41 on the ICE.


Indian rupee, after making a good start, gave away most of its gains and concluded marginally higher against dollar, on Monday, due to sustained selling of the US currency by exporters and banks. Local currency got some support with Economic Affairs Secretary Shaktikanta Das' statement that the soon to be rolled out GST regime will help the country to grow close to 8 percent in next fiscal 2018-19. He also stated that the GST will club nearly a dozen central and state levies into a single national sales tax, helping the country integrate into one market. Some support also came with report that that Foreign exchange reserves rose $1.594 billion to touch a life-time high of $372.73 billion in the week to April 28, supported by increase in foreign currency assets (FCAs). Besides, a firm domestic equity market and fresh bout of foreign fund inflows too supported the domestic unit. Finally, the rupee ended at 64.31, 6 paise stronger from its previous close of 64.37 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 4937.41 crore against gross selling of Rs 5185.66 crore, while in the debt segment, the gross purchase was of Rs 2327.63 crore with gross sales of Rs 424.16 crore.


The US markets consolidated in the last session and made a flat closing lacking any cues. Traders remained on sidelines eyeing some key economic data to be released later in the week. The Asian markets have made mostly a lower start lacking any catalysts to spur further gains and some of them have slipped from a two year high. The Indian markets despite a choppy day of trade ended up by around a quarter percent in the last session. Today, the start is likely to be flat but in green. Markets will be getting some support with IMF's statement that India' growth is expected to rebound to 7.2 per cent in the 2017-18 fiscal and 7.7 per cent in 2018-19 after disruptions caused by demonetisation, the IMF said this while recommending the removal of long-standing structural bottlenecks to enhance market efficiency. Meanwhile, Revenue Secretary Hasmukh Adhia is hopeful of a smooth transition to the GST regime and says it will help domestic firms to become more competitive apart from streamlining the taxation for all business activities. There will be buzz in the banking sector stocks, with largest PSU lender State Bank of India reducing its affordable home loan rates by up to 25 basis points for new borrowers. Other banks and housing finance companies are expected to follow suit in the coming days. Meanwhile, Finance Minister Arun Jaitley has said that the government is open to providing more funds for banks' recapitalization and willing to bring down its equity in the banks to 52 percent once their health improves. There will be lots of earnings reactions to keep the markets buzzing.


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  • Mahindra & Mahindra has reported 4.48% fall in its production to 41467 units in April 2017 as compared to 43410 units in same month last year.
  • NTPC's research arm NTPC Energy Technology Research Alliance has installed India's highest temperature Drop Tube Reactor and Photogrammetry System of Solar Thermal Lab.
  • Coal India is planning to appoint a tax consultant to assist the miner and its subsidiaries in getting ready for the Goods and Services Tax and indirect taxes for the miner.
  • State Bank of India has reduced affordable housing loans rates by 25 basis points to 8.35 percent for new borrowers.
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