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NSE Intra-day chart (10 October 2018)
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Market Commentary 11 October 2018
Markets to make pessimistic start on weak global cues


The strong bounce back witnessed on the street on Wednesday, as both Sensex and Nifty rallied over 450 and 150 points, respectively to end the session in green terrain. The Reserve Bank of India's (RBI) decision to inject Rs 12,000 crore liquidity into the system through purchase of government bonds on October 11 to meet festive season demand for funds boosted the domestic sentiments. The government will purchase bonds with maturity ranging between 2020 to 2030. Some optimism also came with a report stating that the US government's development finance institution Overseas Private Investment Corporation (OPIC) is keen to invest in the development of India's infrastructure, port and solar energy sectors. Separately, another private report stated that as a worsening current account deficit stokes fresh concerns, the government is considering strengthening priority-sector lending for exports to enable greater flow of credit to the sector. Gaining momentum continued in the second half of the session, aided by IMF Director of Fiscal Affairs Department's statement that India's debt is lower than the best or emerging market economies in the world. He cautioned that the global debt has reached a new record high of $182 trillion in 2017. The market participants overlooked a private report stating that India's retail inflation likely sped up in September on higher food and fuel costs, pushed up by a battered rupee and suggesting further policy tightening from the RBI. Traders even paid no heed towards Moody's Investors Service's latest report indicating that the excise duty cut on petrol and diesel is credit negative for India as it will reduce government revenue and increase fiscal deficit by 0.1% to 3.4% of Gross Domestic Product (GDP) in the year ending March 2019. Finally, the BSE Sensex surged 461.42 points or 1.35% to 34,760.89, while the CNX Nifty was up by 159.05 points or 1.54% to 10,460.10.


The US markets ended sharply lower on Wednesday, with Dow Jones Industrial falling more than 800 points in one of the worst sell-offs since February, as fresh concern about the impact of the US-China trade war roiled technology and industrial shares. Besides, lingering concerns about the outlook for interest rates following a recent increase in treasury yields too weighted on market sentiments. Treasury yields moved higher on the day following the release of a Labor Department report showing a rebound in producer prices in the month of September. Meanwhile, the Labor Department said its producer price index for final demand increased by 0.2 percent in September after edging down by 0.1 percent in August. Street had expected prices to rise by 0.2 percent. Excluding decreases in prices for food and energy, core producer prices still rose by 0.2 percent in September after slipping by 0.1 percent in August. The uptick in core prices also matched street estimates. The report also said the annual rate of producer price growth slowed to 2.6 percent in September from 2.8 percent in August, although the annual rate of core producer price growth accelerated to 2.5 percent from 2.3 percent. Dow Jones Industrial Average dropped 831.83 points or 3.15 percent to 25,598.74, Nasdaq slipped 315.97 points or 4.08 percent to 7,422.05 and S&P 500 was down by 94.66 points or 3.29 percent to 2,785.68.


Crude oil futures declined on Wednesday and settle near two-week lows amid prospects of a drop in crude demand due to weak global economic growth outlook. Besides, increasing tensions between the US and China too have raised concerns that global oil demand will decline in the near term. Meanwhile, Hurricane Michael crashed into the Florida's northwestern Panhandle coast, flooding towns and ripping up trees with 155 mile per hour winds. Due to platform evacuations and shut downs ahead of the Hurricane Michael, it is reported that more than one-third of natural gas output from the offshore US Gulf of Mexico wells has been lost. Benchmark crude oil futures for November slipped $1.79 or 2.4% to settle at $73.17 a barrel on the New York Mercantile Exchange. December Brent crude declined $1.91 or 2.3 percent to settle at $83.09 a barrel on London's Intercontinental Exchanged.


Halting a six-day slide, Indian rupee ended stronger against dollar on Wednesday, due to increased selling of the American currency by exporters and banks. Traders took some encouragement with report stating that Reserve Bank of India (RBI) will inject Rs 12,000 crore liquidity into the system through purchase of government bonds on October 11 to meet the festival season demand for funds. It added that the government will purchase bonds with maturity ranging between 2020 to 2030. The market participants overlooked a private report stating that India's retail inflation likely sped up in September on higher food and fuel costs, pushed up by a battered rupee and suggesting further policy tightening from the RBI. A strong domestic equity market too propped up the rupee sentiments in early trade, as the local markets made a strong come back from last session's fall. On the global front, euro steadied on Wednesday near $1.15, moving away from seven-week lows after a fall in US Treasury yields took some steam out of the dollar's recent run. Finally, the rupee ended at 74.21, 18 paise stronger from its previous close of 74.39 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 5549.76 crore against gross selling of Rs 6373.16 crore, while in the debt segment, the gross purchase was of Rs 871.78 crore with gross sales of Rs 1596.76 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.20 crore against gross selling of Rs 1.25 crore.


The US markets declined on Wednesday as investors worried that sharply rising interest rates would constrain the nation's historic economic expansion. Asian markets were trading in red on Thursday after Wall Street suffered its worst drubbing in eight months, a conflagration of wealth that could threaten business confidence and investment across the globe. Bulls made a strong comeback, after witnessing half a percent cut in previous session, as both Sensex and Nifty ended day with over a percent gains amid the rupee recovering from record lows coupled with expectations of robust corporate earnings for the second quarter ended September 2018. Today, the markets are likely to make a gap-down opening on weak global cues. There will be some cautiousness with a private report stating that private equity and venture capital (PE/VC) investments in India declined 23% to $6.7 billion in the third quarter of this year as investors adopted a cautious approach. On a year to date basis however, PE/VC investments in India are higher by 17.4% and the investment tally also looks set to surpass the previous year high driven by some large deals in the pipeline, provided there is no major macro setback. Traders will be looking for second-quarter corporate earnings for the financial year 2018-2019, with India's biggest software services exporter Tata Consultancy services (TCS) reporting quarterly results today. IT companies are expected to report healthy numbers led by the ramp-up of recent large deal wins, improving the macro environment, and strong seasonality. Meanwhile, as per the draft National Policy on Electronics (NPE) released by the Ministry of Electronics and IT, the IT ministry looks to create a $400 billion electronics manufacturing industry by 2025 with mobile devices segment accounting for three-fourths of the production. There will be some buzz in aviation sector stocks with report that the central government slashed the excise duty on aviation turbine fuel (ATF) from 14% to 11%. This comes as a relief to the aviation industry that has been hit hard by high fuel prices. The duty change would come into force with effect from the October 11, 2018.


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  • Tata Motors Group global wholesales in September 2018, including Jaguar Land Rover, stood at 1,23,577 units, higher by 6%, as compared to September 2017. 
  • M&M's subsidiary -- Mahindra Agri Solutions-- has incorporated a subsidiary - Mahindra Summit Agriscience with effect from October 9, 2018. 
  • Dr. Reddy's Laboratories has launched Colesevelam HCI Tablets, USP, a therapeutic equivalent generic version of WELCHOL Tablets in the US market approved by the USFDA. 
  • IndusInd Bank has launched the IndusInd Bank Duo Card which is India's first 2 EMV chip debit cum credit card.
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