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NSE Intra-day chart (10 September 2018)
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Market Commentary 11 September 2018
Market likely to make a cautious start


Bears made strong come back on Dalal Street with major indices ending the Monday's trade with a cut of around one and a half percent, breaching their crucial 11,500 (Nifty) and 38,000 (Sensex) levels. Markets started the session on pessimistic note and never looked in recovery mood to end the session near intraday low levels. Sentiments remained dampened, as traders reacted negatively to President Donald Trump's statement that he wants to stop the subsidies that growing economies like India and China have been receiving as he wants the US, which he considers as a developing nation, to grow faster than anybody. Sentiments also remained downbeat with the State Bank of India's (SBI) report that with the currency losing more than 11% to the dollar this year, India will have to shell out an extra Rs 68,500 crore when repaying short-term debt in the coming months. Weakness in Indian rupee against dollar too dampened sentiments. The rupee tumbled as much as 1.2% Monday, the most in a month, to a record low of 72.5587, leading declines among Asia's emerging-market currencies. Adding to the pessimism, Global rating agency Moody's Investors Service said that a sustained weakening of the rupee would be credit negative for its rated Indian companies. The rating agency added that it will have an adverse impact particularly on those entities that generate revenue in rupees but rely on US dollar debt to fund their operations and have significant dollar-based costs, including capital expenses. Markets extended losses in second half of the session with a report that total liabilities of the government increased to Rs 79.8 lakh crore at end-June 2018 from Rs 77.98 lakh crore at end-March 2018. Public debt accounted for 89.3% of total outstanding liabilities at end-June 2018 with internal debt accounting for 83.0% share. Nearly 24.9% of the outstanding dated securities had a residual maturity of less than five years. Traders shrugged off the Reserve Bank of India's (RBI) data showing that India's current account deficit (CAD) as a percentage of GDP declined marginally to 2.4% in the April-June quarter of 2018-19 against 2.5% in the year-ago period. Market participants also paid no heed towards Economic affairs secretary Subhash Chandra Garg's statement that the government will ensure fiscal deficit target is not breached. Finally, the BSE Sensex declined by 467.65 points or 1.22% to 37,922.17, while the CNX Nifty was down by 151.00 points or 1.30% to 11,438.10.


The US markets ended mostly in green, with the S&P 500 and the Nasdaq each snapping a four-day losing streak, as technology shares tried to regain some of the steep losses from last week, while Dow Jones Industrial Average settled marginally in red. Technology stocks dropped nearly 3% last week as investors grappled with the possibility of stronger regulation for social media companies. The day's gains were fairly broad-based, with eight of the 11 primary S&P 500 industry groups finishing in positive territory led by utilities and real estate. However, up-move remained capped amid lingering trade concerns after President Donald Trump ramped up trade tensions with China last Friday. Trump said that he was ready to go on hitting China with an additional $267 billion worth of tariffs. Further, traders seemed reluctant to make any significant moves amid a lack of major US economic data. Reports on producer and consumer price inflation, retail sales and industrial production as well as the Fed's Beige Book may attract attention in the coming days. The S&P 500 gained 5.45 points or 0.19 percent to 2877.13 and Nasdaq added 21.62 points or 0.27 percent to 7924.16, while Dow Jones Industrial Average dropped 59.47 points or 0.23 percent to 25857.07.


Crude oil futures ended lower on Monday on the back of growing concerns that storms churning in the Atlantic will hurt energy demand on the US East Coast. The market was showing concerns about Hurricane Florence in the Atlantic and its potential to weaken energy demand on the East Coast. As per the National Hurricane Center, the storm is expected to approach the coast of South Carolina and North Carolina on Thursday. However, crude prices continued to climb on expectations that renewed sanctions on Iran will tighten the world's supply of oil. Benchmark crude oil futures for October declined 21 cents or 0.3 percent to settle at $67.54 a barrel on the New York Mercantile Exchange. November Brent crude gained 54 cents or 0.7% to settle at $77.37 a barrel on London's Intercontinental Exchanged.


Breaching the psychological 72 per dollar mark, Indian rupee ended at record low closing level against dollar on Monday, hurt by fresh demand for the American currency from importers. The rupee sentiments were hit after India's current account deficit (CAD) widened to the most in five years. The CAD widened to $15.8 billion in the April-June quarter from a year ago due to a larger trade gap. The CAD widened to 2.4% of gross domestic product (GDP) in April-June, from 1.9% of GDP in the January-March quarter. Sentiments also remained downbeat with the State Bank of India's (SBI) report that with the currency losing more than 11% to the dollar this year, India will have to shell out an extra Rs 68,500 crore when repaying short-term debt in the coming months. Besides, a sharp sell-off in the domestic stock market largely led to weak rupee sentiments. On the global front, dollar held largely steady against a basket of major currencies on Monday thanks to strong US August jobs data and amid fears of a possible escalation in the China-US trade conflict. Finally, the rupee ended at 72.45, 71 paise weaker from its previous close of 71.74 on Friday.


The FIIs as per Monday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 4850.98 crore against gross selling of Rs 4713.20 crore, while in the debt segment, the gross purchase was of Rs 805.75 crore with gross sales of Rs 1422.04 crore. Besides, in the hybrid segment, there was no buying and selling.


The US markets ended mostly higher on Monday on optimism for further tax relief; although gains were limited as traders seemed reluctant to make any significant moves amid a lack of major US economic data. Asian markets were trading mostly in red on Monday as trade tensions between the US and China remained in focus. The Indian markets registered their biggest single-day fall in almost six months on Monday as renewed concerns over an escalation of trade war between the US and China coupled with fall in the rupee that touched a new low weighted on the investors' sentiment. Today, the markets are likely to make a cautious start on Tuesday, amid weak trade in other Asian markets. Rupee will be in the main focus. There will be some cautiousness with a private report that India's economic growth is expected to moderate in the second half of this financial year after a strong first quarter, owing to tighter financial conditions, high oil prices and slowing global growth. It expects real GDP growth to slow to 7-7.3% in the second half of this fiscal from 8.2% in June 2018 quarter. Traders will also be reacting to another private report that a depreciating currency will impact the economy adversely, as India imports around 83% of its crude oil requirement. A surge in the oil import bill can widen fiscal and current account deficits. Traders will also be concerned about India Meteorological Department's (IMD) data showing that the countrywide monsoon saw the highest rain deficiency of the season in August -- ironically the month when a large part of Kerala was submerged and many other states received excess rainfall. There will be some buzz in the steel sector stocks with Moody's Investors Service's statement that robust steel demand, especially from the domestic construction, infrastructure and automotive sectors will keep end-product prices high, even as rising costs for key inputs, coking coal and iron ore pressure profitability. Meanwhile, Asian Development Bank (ADB) in its latest report said India's share in the GDP of Asia and Pacific region has increased to 17.3% in 2017 from 14.6% in 2000.


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



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Nifty Top volumes




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  • Coal India's subsidiary -- MCL-- has complied with one of the two notices it received for violating environmental norms from Pollution Control Board Odisha. 
  • NTPC's wholly owned subsidiary -- NTPC Vidyut Vyapar Nigam-- has started power supply of 300 MW to Bangladesh. 
  • Yes Bank is eyeing to grow its retail loan book to between Rs 55,000-56,000 crore by 2019-20. 
  • Tata Motors Group global wholesales in August 2018, including Jaguar Land Rover, stood at 1,07,030 units, higher by 14%, over August 2017.
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