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NSE Intra-day chart (08 June 2017)
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Market Commentary 09 June 2017
Markets to make another muted start on mixed global cues

It turned out to be a lethargic performance from Indian benchmark indices on Thursday, as they failed to snap the session in the green territory and settled marginally below the neutral line. Today's session largely remained characterized by choppiness, as the aimless indices moved only sideways in a tight band for most part of the day, as investors and foreign funds were adopting a cautious approach, ahead of key political and economic events in the U.S. and Europe. Sentiments remained subdued after Reserve Bank of India (RBI) raised concerns over the possibility of fiscal slippages due to the farm loan waivers. RBI Governor Urjit Patel said unless that state governments' budgets allow that fiscal space to go in for a loan waiver, it would be risky to tread on that path.  RBI also cut the economic growth projection to 7.3% for the current fiscal from 7.4% earlier. The central bank, however, used a less hawkish tone and reduced the Statutory Liquidity Ratio (SLR) in its second bi-monthly monetary policy for financial year 2017-18. Traders turned anxious after chief economic adviser Arvind Subramanian expressed his unhappiness over the Reserve Bank's inflexibility on interest rates. He warned that real policy rates are becoming tighter and rising at a time of low inflation and slowing growth. However, losses remained capped with UNCTAD's latest report that India would be the top prospective foreign direct investment (FDI) destination globally after the US and China. It also said that an improved economic outlook in major Asian economies such as India, China is likely to lift investor confidence and help boost FDI inflows by about 15 percent in 2017. Finally, the BSE Sensex declined 57.92 points or 0.19 % to 31213.36, while the CNX Nifty was down by 16.65 points or 0.17% to 9,647.25. 


The US markets closed higher on Thursday, with the Nasdaq Composite Index finishing at a record, marking its 38th all-time closing high in 2017. The former FBI Director James Comey's appearance in front of the US Senate Intelligence Committee concluded without any significant revelations. The street had signaled that above events don't appear to threaten the stock market's extended push into record territory, which has been driven by President Donald Trump's promises of tax cuts, infrastructure spending and deregulation. On the economy front, the number of Americans who sought unemployment benefits fell in early June and remained near the lowest level in decades. Initial jobless claims dropped by 10,000 to 245,000 in the seven days stretching from May 28 to June 3. New applications for unemployment benefits had shot up in late May to a five-week high, but the increase was largely due to the timing of the Memorial Day holiday and not a reflection of any underlying shift in the health of a vibrant US labor market. The Dow Jones Industrial Average added 8.84 points or 0.04 percent to 21,182.53, Nasdaq was up 24.38 points or 0.39 percent to 6,321.76, while S&P 500 edged higher by 0.65 points or 0.03 percent to 2,433.79.


Crude oil futures continued their weak trend on Thursday and ended in red for second consecutive day, briefly dipping to a one-month low on the back of concerns of rising global output, following the return of Nigerian crude to the market and an unexpected surge in US crude stockpiles. Also, with production from the US and others picking up, OPEC's supply quota plan with Russia has been rendered essentially ineffective.  Benchmark crude oil futures for July delivery ended lower by $0.08 or 0.2 percent to $45.64 on the New York Mercantile Exchange. In London, Brent crude for July delivery ended down by $ 0.14 to $47.92 on the ICE.


Indian rupee strengthened against US dollar for second consecutive session on Thursday, on increased selling of the American currency by exporters and banks. Sentiments remained positive with UNCTAD's latest report that India would be the top prospective foreign direct investment (FDI) destination globally after the U.S. and China. It also said that an improved economic outlook in major Asian economies such as India, China is likely to lift investor confidence and help boost FDI inflows by about 15 percent in 2017. However, dollar's gains against its rivals overseas and a weak domestic equity market weakened the rupee sentiment. On the global front, euro steadied near six-month highs on Thursday ahead of a European Central Bank policy announcement while sterling set a two-week high as markets priced in a victory for Britain's Conservative Party in national elections. Finally, the rupee ended at 64.21, 12 paise stronger from its previous close of 64.33 on Wednesday.


The FIIs as per Thursday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5119.15 crore against gross selling of Rs 5029.81 crore, while in the debt segment, the gross purchase was of Rs 3466.96 crore with gross sales of Rs 742.97 crore.


The US markets managed a modestly positive close in last session despite choppy trade, traders remained reluctant to make longer bets, as they kept an eye on developments on Capitol Hill, focusing on former FBI Director James Comey's testimony before the Senate Intelligence Committee. The Asian markets have made a mixed start, with some indices trading in red as a note of caution spread across financial markets after an exit poll showed the UK faces a hung parliament. The Japanese market though was trading up by around a percent, as yen weakened against the dollar. The Indian markets showing a lackluster trade ended marginally in red in the last session. Today, the start is likely to remain cautious and traders will be eyeing the major global developments following the mixed cues after an exit poll suggested British Prime Minister Theresa May's Conservative party not getting majority.  On the domestic front traders will be getting some support with UN trade report that despite stagnant foreign direct investment (FDI) inflow of $ 44 billion in 2016, India will most likely remain most favoured destination due to its attractiveness among MNCs for cross-border mergers and acquisitions. Meanwhile, Chief Economic Adviser Arvind Subramanian has expressed concern over growing protectionism in global markets and felt that India needs open markets to grow at 8-10%. He said that the biggest beneficiaries of the open market policy or globalisation have been middle income countries and the continuation of this is in their interest. There will be some buzz in the power and coal stocks on report that India's coal imports in May declined 6 per cent due to lackluster demand from the power sector and sufficient supply of domestic fuel.


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  • Kotak Mahindra Bank is planning to raise up to Rs 5,000 crore by tapping domestic and overseas markets to cater to its fund requirements.
  • Tata Power through its subsidiary - Tata Power Delhi Distribution has signed a Distribution Franchisee Agreement with Ajmer Vidyut Vitran Nigam to cater to the power requirements of customers in Ajmer for a period of 20 years.
  • HDFC Bank has introduced charges on Unified Payments Interface.
  • TCS has launched 'BaNCS App Development Kit' that enables banks to design and build their own Apps faster and seamlessly deploy across devices and desktops.
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