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Market Commentary 11 July 2019
Markets to make an optimistic start tracking firm global cues


Indian equity indices saw a further fall on Wednesday's trading session, with the Sensex and the Nifty closing below their crucial psychological levels of 38,600 and 11,500, respectively. After a cautious start, the markets traded in negative terrain during the whole day, affected with Moody's Investors Service's statement that weak growth prospects for India will complicate the government's fiscal consolidation efforts, weighing on the sovereign's credit quality. Sentiments also remained downbeat, after CRISIL in its earnings preview stated that India Inc will see the slowest quarterly revenue growth in two years, which will more than halve to 6 percent from 14-15 percent, due to a deceleration in consumption and lower realisations. Bears held their tight grip on the markets in the second half of the trading session, amid weak cues from European markets. Market participants got anxious, amid a private report showing that India's retail inflation is likely reached an eight-month high in June on rising food prices, but stayed under the Reserve Bank of India's medium-term target of 4% for an eleventh straight month. Investors paid no heed towards the latest finance ministry data report which showed that deposits in bank accounts opened under Jan Dhan scheme, launched about five years ago by the Modi-government, have crossed the Rs 1 lakh crore mark. Finally, the BSE Sensex fell 173.78 points or 0.45% to 38,557.04, while the CNX Nifty was down by 57.00 points or 0.49% to 11,498.90.


The US markets ended higher on Wednesday on account of optimism about a near-term interest rate cut. Federal Reserve Jerome Powell is prepared to tell lawmakers that crosscurrents have continued to weigh on the US economic outlook since the central bank's June meeting. Powell's prepared remarks before the House Financial Services Committee note crosscurrents, such as trade tensions and concerns about global growth, have been weighing on economic activity and the outlook. The Fed chief points out that increased uncertainties about the economic outlook and muted inflation pressures led the central bank to pledge to act as appropriate to sustain the expansion at its June meeting. Powell notes that many meeting participants saw that the case for a somewhat more accommodative monetary policy had already strengthened. A report released by the Commerce Department showed wholesale inventories in the US increased in line with Street estimates in the month of May. The Commerce Department said wholesale inventories rose by 0.4 percent in May after climbing by 0.8 percent in April. The continued rise in inventories matched expectations. Inventories of durable goods edged up by 0.3 percent in May, as sharp increases in inventories of automotive products and professional equipment were partly offset by steep drops in inventories of lumber, metals and electrical equipment. The report said inventories of non-durable goods also climbed by 0.5 percent, with notable growth in inventories of farm products and miscellaneous non-durable goods offsetting a slump in inventories of petroleum products. Dow Jones Industrial Average gained 76.71 points or 0.29 percent to 26860.20. Nasdaq surged 60.80 points or 0.75 percent to 8202.53 and S&P 500 was up by 13.44 points or 0.45 percent to 2993.07.


Crude oil futures ended higher with gains of over 4 percent on Wednesday as US crude supplies dropped a fourth week and a storm threatens Gulf of Mexico output. The Energy Information Administration (EIA) reported that US crude supplies declined by 9.5 million barrels for the week ended July 5. The American Petroleum Institute on Tuesday reported an 8.1 million-barrel drop. The EIA data also showed that gasoline inventories were also down by 1.5 million barrels, while distillate stockpiles climbed by 3.7 million barrels last week. Meanwhile, a tropical cyclone is expected to form by Thursday over the North-Central Gulf of Mexico. As of 11:30 a.m. central time Wednesday, a total of nearly 32% of oil production in the Gulf of Mexico and almost 18% of natural-gas production were shut in as a precaution. Benchmark crude oil futures for August surged $2.60 or 4.5 percent to settle at $60.43 a barrel on the New York Mercantile Exchange. September Brent rose $2.85 or 4.4 percent to settle at $67.01 a barrel on London's Intercontinental Exchange.


Indian rupee ended marginally lower against US dollar on Wednesday, due to fresh demand for the American currency from banks and importers. Traders remained concerned with Moody's Investors Service's statement that weak growth prospects for India will complicate the government's fiscal consolidation efforts, weighing on the sovereign's credit quality. Some concern also came with a private report showing that India's retail inflation is likely reached an eight-month high in June on rising food prices, but stayed under the Reserve Bank of India's medium-term target of 4% for an eleventh straight month. Besides, a weak trend at Dalal Street coupled with US dollar's gain against other currencies overseas weighed on the local unit. On the global front, dollar edged toward a three-week high against a basket of major currencies on Wednesday, as an unwinding of bets on deep US interest rate cuts pushed Treasury yields higher. Finally, the rupee ended at 68.58, 7 paise weaker from its previous close of 68.51 on Tuesday.


The FIIs as per Wednesday'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 4142.76 crore against gross selling of Rs 5019.59 crore, while in the debt segment, the gross purchase was of Rs 3394.55 crore with gross sales of Rs 1518.51 crore. Besides, in the hybrid segment, the gross buying was of Rs 19.97 crore against gross selling of Rs 23.07 crore.


The US markets closed higher on Wednesday after Federal Reserve Chairman Jerome Powell set the stage for the central bank to cut interest rates to bolster flagging growth. Asian markets are trading in green in early deals on Thursday following overnight gains on Wall Street. Indian markets ended lower with losses of round half a percent on Wednesday amid cautiousness as US President Donald Trump once again warned India that its high tariffs were not acceptable. Today, the markets are likely to make an optimistic start tracking firm global cues. Traders will be getting encouragement with Commerce and Industry Minister Piyush Goyal's statement that foreign direct investments (FDI) into the country grew 3 per cent to $6.95 billion in April. During 2018-19, the country recorded the highest-ever total FDI inflow of $64.38 billion, which is 6 per cent higher as compared to 2017-18. Also, there will be some support with CBDT Chairman Pramod Chandra Mody's statement that the government has re-calibrated and fixed the direct taxes collection target for this financial year at Rs 13.35 trillion, a task that is difficult, but achievable. However, there may be some cautiousness with a private report that the country's real GDP growth is likely to be 6.7 percent from 6.9 percent forecasted earlier in FY20 citing the continuing slowdown in consumption demand and warned that a revival is unlikely before FY21. Besides, Fitch Ratings stated that India's budget outlined some reforms that could support the economy, but its fiscal stance was left broadly unchanged with no plans for meaningful consolidation. Meanwhile, the Union Cabinet has approved a bill that seeks to merge 13 central labour laws into a single code which would apply on all establishments employing 10 or more workers. There will be some buzz in the telecom stocks with report that telecom operators intend to install over 57,500 towers for mobile connectivity in rural areas during the financial year 2019-20. There will be some reaction in hospital industry stocks with ICRA's report stating that the hospital sector is seeing better days ahead after more than two years of subdued performance, mainly due to several regulatory measures, including the cap on prices of stents and knee implants by the National Pharmaceutical Pricing Authority (NPPA). There will be some result reactions too, to keep the markets in action.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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NSE Nifty




BSE Sensex





Nifty Top volumes




Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank





Tata Motors





State Bank of India










Tata Steel






  • M&M has crossed a significant milestone, rolling out the 1 millionth vehicle from each of its 3 automotive manufacturing plants in Chakan, Zaheerabad and Haridwar. 
  • Tata Motors' wholly owned subsidiary -- JLR has reported sales of 47,060 vehicles in June 2019, down 9.6% compared to June 2018. 
  • Bharti Airtel has partnered with Irish and India based global EdTech, Shaw Academy to offer popular online courses to its mobile customers.  
  • Wirecard has entered into a partnership with Yes Bank.
News Analysis