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NSE Intra-day chart (08 August 2017)
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Market Commentary 09 August 2017
Markets to remain somber on geopolitical worries

Tuesday turned out to be a disappointing day of trade for Indian equity benchmarks, with Nifty and Sensex breaching their crucial 10,000 and 32,100 levels, respectively, after Securities and Exchange Board of India (SEBI) directed bourses to initiate action against 331 suspected shell companies that are listed and these scrips will not be available for trading this month. The regulators directive came after the Corporate Affairs ministry shared a list of 331 listed companies that are suspected to be shell entities and could even face compulsory delisting. Markets started the session with optimism but it soon fizzled out and both the domestic indices entered into red terrain, as traders turned cautious with the private report stating that it ‘suspects' that there has been a change in the stance by the authorities to let the rupee appreciate more, but warned that it can hurt manufacturing and exports. Some concerns also came with Engineering exporters' body EEPC stating that shipping companies are facing difficulties post GST as their drawback refunds will not be released till September-end or October. Meanwhile, the securitisation market has hit a record high of $1.02 trillion in fiscal 2017, helped by a surge in volume of pass-through certificates (PTCs). Traders failed to get any sense of relief  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. Traders also failed to get any solace 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. Finally, the BSE Sensex declined 259.48 points or 0.80% to 32,014.19, while the CNX Nifty was down by 78.85 points or 0.78% to 9,978.55.


The US markets closed lower on Tuesday, reversing earlier gains as an early rally in financial, tech and energy stocks fizzled amid tough talk from President Donald Trump on North Korea. Trump told that North Korea would be met with fire and fury like the world has never seen should it continue to threaten the US. That followed reports earlier in the day that North Korea has successfully miniaturized a nuclear warhead that could fit inside a missile. On the economy front, sentiment among small-business owners skyrocketed in July as customer demand improved, in spite of continued gridlock in Washington. The closely-watched sentiment gauge from the National Federation of Independent Business rose 1.6 points to 105.2. That snapped a five-month streak of readings that either declined or remained the same, and easily beat the consensus forecast for a decline to 103.2. The jump in the July survey reflected better views of the labor market: owners reported having more open positions now as well as plans to hire more in the future. The number of job openings rose to a fresh record in June while hiring decreased, evidence of the difficulties companies are having finding suitable employees. The Dow Jones Industrial Average lost 33.08 points or 0.15 percent to 22,085.34, the Nasdaq dropped 13.31 points or 0.21 percent to 6,370.46, while the S&P 500 edged lower by 5.99 points or 0.24 percent to 2,474.92.


Crude oil futures extended their decline on Tuesday, as OPEC gathered to discuss its supply quota plan and as rising output from major oil producers offset reports that Saudi Arabia is planning to cut exports to Asia next month. It was reported that Saudi Arabia will cut crude oil allocations to its customers worldwide in September by at least 520,000 barrels per day, to stem the global crude glut. Also adding to concerns over the glut in supply, were reports Libya'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 $0.22 or 0.5 percent to $49.17 on the New York Mercantile Exchange. In London, Brent crude for September delivery ended lower by $0.36 at $52.02 a barrel on the ICE.


Indian rupee strengthened against the US dollar on Tuesday, on persistent selling of the American currency by exporters and banks. Besides, dollar's weakness against some other currencies overseas supported the rupee sentiment. Some support also came 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. On the global front, the dollar inched down slightly in Asian trading on Tuesday, but maintained most of the gains it made on last week's robust employment data that kept hope alive that the US Federal Reserve could still increase interest rates this year. Finally, the rupee ended at 63.63, 17 paise stronger from its previous close of 63.80 on Monday.


The FIIs as per Tuesday'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 3834.07 crore against gross selling of Rs 4000.39 crore, while in the debt segment, the gross purchase was of Rs 1826.47 crore with gross sales of Rs 581.85 crore.


The US markets made a mildly lower closing in the last session that ended the Dow's streak of setting new record closing highs for nine consecutive sessions. Geopolitical worries mainly weighed on the sentiments with remarks by President Donald Trump adding to concerns about rising tensions between the US and North Korea. The Asian markets have made mostly a lower start tailing the weakness in US markets, as investors took a risk-off approach after the U.S. and North Korea exchanged threats amid escalating tensions between the two nations. Japanese market was down by over a percent as the yen and gold climbed. The Indian markets suffered sharp sell-off in the last session, after capital market regulator SEBI directed exchanges to initiate action against 331 suspected shell companies. Today, the start is likely to remain somber on sluggish global cues and geopolitical worries will keep mounting pressure on the domestic markets too. Traders however may get some support with the government statement that job loss through automation in India should not be a matter of concern as the "growth momentum" of the economy will result in new job opportunities. Also, Union Power Minister Piyush Goyal has said that the newly-introduced Goods and Services Tax (GST) is crucial for promoting transparency and a corruption-free business environment in the country. Markets will get additional support with the India Meteorological Department (IMD), setting stage for a good kharif harvest and strong rural demand stating that monsoon rainfall is likely to remain normal in the remaining two months of the season. There will be some buzz in the sugar space, with report that India is planning to allow additional 200,000 tonnes of duty-free sugar imports, as production fell below consumption in 2016/17 marketing year ending on Sept 30. There will be lots of important earnings announcements too, to keep the markets in action today.


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Bharti Infratel






  • Wipro has entered into global partnership with Excelfore to offer secure connectivity solutions for next generation smart and autonomous vehicles.
  • Bharti Airtel has unveiled a new bonus data offer for its new customers of broadband users under which it is offering as much as 1000 GB extra data.
  • Tata Steel has reported a consolidated net profit of Rs 921.09 crore for the quarter ended June 30, 2017 as against a net loss of Rs 3183.07 crore for the corresponding quarter in the FY17.
  • Tata Motors Group global wholesales in July 2017, including Jaguar Land Rover, stood at 98,534 units, higher by 12%, over July 2016.
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