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NSE Intra-day chart (10 January 2019)
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Market Commentary 11 January 2019
Markets to make positive start on firm global cues


Profit booking in the recent gainers spoiled the four-day upward rally of Indian equity benchmarks on Thursday. After a cautious start, the markets remained lackluster throughout the session, tracking weak global markets. Trading sentiments got hit with Engineering Exports Promotion Council's (EEPC) statement that there was a sharp annualised drop of over 54% in the gross bank credit deployment in the export sector. It further noted that the Reserve Bank and the government need to ensure timely and affordable bank credit for exporters to boost outbound shipments. The market participants were seen taking note of the World Bank CEO Kristalina Georgieva's statement that in this more challenging environment, developing economies like India, must get ready to cope with possible turbulence and to build fiscal and monetary space, to build policy buffers. She also said that the growth of the global economy is expected to slow to 2.9% in 2019 compared with 3% in 2018. Traders remained pessimistic even though the Federation of Indian Chamber of Commerce and Industry (FICCI) and PwC in their latest survey report showed that India Inc expects Indian economy likely to grow over 7% in the next 12 months on the back of a number of policy initiatives taken by the government. In the second half of the session, the key indices extended their losses to end near intraday low points, on account of continuous selling on the counters. The market participants failed to take any sense of relief with a private report indicating that India's December retail inflation is expected to have eased to its lowest since June 2017 as food costs fell and fuel prices rose at a slower pace, giving the central bank breathing space to keep policy on hold. Investors even overlooked rating agency ICRA's report that toll collections are likely to witness a double-digit growth in the next financial year, propelled by an increase in commercial vehicle sales and wholesale price index (WPI). The street even failed to take encouragement with Finance Minister Arun Jaitley's statement that the government's electric mobility programme will promote manufacturing and job creation and reduce dependency on oil import, besides reducing pollution. Finally, the BSE Sensex lost 106.41 points or 0.29% to 36,106.50, while the CNX Nifty was down by 33.55 points or 0.31% to 10,821.60.


Extending their gains for fifth straight day, the US markets ended higher on Thursday as traders remain optimistic the US and China will eventually reach a long-term trade deal. Delegations from Washington and Beijing ended three days of trade negotiations in China on Wednesday. China's commerce ministry said Thursday the negotiations were extensive and had helped set up a foundation for further talks. This week's face-to-face meetings were the first to take place since US President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce last month. If both sides are unable to secure a comprehensive trade agreement by March 2, Trump has said he plans to raise tariffs to 25% from 10% on $200 billion worth of Chinese imports. However, gains remained capped as disappointing holiday sales from Macy's and revenue guidance cut from American Airlines pressured retail and airline shares. Fear that the US government shutdown might continue for a long time also weighed on stocks. Macy's shares tanked more than 18% - their worst day ever -after reporting its same-store sales grew by just 1.1% in November and December. The company also cut its earnings and revenue forecast for fiscal 2018.  On the economic front, the Labor Department released a report showing a bigger than expected drop in initial jobless claims in the week ended January 5. The report said initial jobless claims fell to 216,000, a decrease of 17,000 from the previous week's revised level of 233,000. Street had expected jobless claims to dip to 225,000 from the 231,000 originally reported for the previous week. Dow Jones Industrial Average surged 122.80 points or 0.51 percent to 24001.92, Nasdaq rose 28.99 points or 0.42 percent to 6986.07 and S&P 500 was up by 11.68 points or 0.45 percent to 2596.64.


Crude oil futures ended higher for ninth straight session on Thursday, the longest winning streak in about nine years for the US benchmark. Oil prices were significantly higher for the week to date, with West Texas Intermediate (WTI) up about 9.7%. That will be the largest weekly rise since December 2016. The recent advance for the energy complex has been powered by optimism over US-China trade talk which ended Wednesday, as well as a December output drop from major producers and a more-recent decline in US crude inventories. Benchmark crude oil futures for February gained 23 cents or 0.4 percent to settle $52.59 a barrel on the New York Mercantile Exchange. March Brent crude added 24 cents or 0.4 percent to settle at $61.68 a barrel on London's Intercontinental Exchange.


Indian rupee, recovering from the early losses, ended slightly higher against the American currency on Thursday, due to increased selling of the American currency by exporters and banks. Sentiments got support with the Federation of Indian Chamber of Commerce and Industry (FICCI) and PwC in their latest survey report showed that India Inc expects Indian economy likely to grow over 7% in the next 12 months on the back of a number of policy initiatives taken by the government. Adding to the optimism, a private report indicated that India's December retail inflation is expected to have eased to its lowest since June 2017 as food costs fell and fuel prices rose at a slower pace, giving the central bank breathing space to keep policy on hold. The rupee's rise was also aided by dollar's weakness against other currencies and falling crude oil prices. On the global front, dollar on Thursday languished near a 3-month low on signs the Federal Reserve may soon pause its interest rate tightening cycle. Finally, the rupee ended at 70.41, 5 paise stronger from its previous close of 70.46 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 4402.40 crore against gross selling of Rs 3924.61 crore, while in the debt segment, the gross purchase was of Rs 1315.73 crore with gross sales of Rs 881.57 crore. Besides, in the hybrid segment, the gross selling was of Rs 0.07 crore against no buying.


The US markets ended higher on Thursday after Federal Reserve Chairman Jerome Powell reiterated the central bank's willingness to adjust its pace of interest-rate increases if economic conditions weaken. Asian markets were trading in green on Friday in early deals, after Federal Reserve Chairman Jerome Powell reiterated the US central bank can be patient on raising interest rates further. Snapping four-day winning streak, Indian markets ended near intra-day low levels on Thursday on selling in banking shares amid negative cues from other Asian markets coupled with jump in oil prices. Today, the markets are likely to make optimistic start tacking firm global cues. Traders will be looking ahead to the Index of industrial production (IIP) data for the month of November to be released later in the day. Traders will be getting encouragement with report that the Goods and Services Tax (GST) Council approved a series of measures aimed at benefiting small businesses, such as a doubling of the exemption threshold to Rs 40 lakh and an increase in the turnover limit for service providers looking to avail of the low-compliance composition scheme. The higher turnover cap of Rs 1.5 crore, against the earlier Rs 1 crore, for availing composition scheme of paying 1 percent tax will be effective from April 01. While the exemption limit for registration and payment of GST has been raised to Rs 40 lakh from Rs 20 lakh for suppliers of goods, states would have flexibility to decide on one of those in a week. Some support may also come with Commerce Minister Suresh Prabhu's statement that the government is considering providing transport subsidy to states for promoting agriculture exports. On credit issues being faced by exporters, he said, the financial services secretary would hold meeting with banks on the matter. However, there may be some cautiousness with a private report indicating that in the first eight months of FY 2018-19, India's fiscal deficit target has overshot by 15 percent, largely due to a revenue shortfall rather than front-loading of expenditure. It added that the current run-rate of the government's GST revenues is tracking a shortfall of Rs 70,000-80,000 crore against the annual budget. Meanwhile, the Securities and Exchange Board of India (SEBI) announced portfolio concentration norms for equity exchange-traded funds (ETFs) and index funds. SEBI's new guidelines are meant to address risks related to portfolio concentration in ETFs and index funds. According to the new norms, the index shall have a minimum of 10 stocks as its constituents. There will be some important earnings announcements also to keep the markets buzzing. Infosys will release its financial results for the third quarter of FY19 later in the day.


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  • Bajaj Finance has raised Rs 1,495 crore through allotment of 14950 Secured Redeemable NCDs of face value of Rs 10 lakh each. 
  • Maruti Suzuki India has changed the prices of select models owing to increase in commodity prices and foreign exchange rates etc. 
  • Mahindra & Mahindra has opened booking for its upcoming new compact SUV model XUV300 on January 09, 2019. 
  • Tata Motors will launch 7-seat variant of Harrier in 2019, which has been code-named the H7X.
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