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NSE Intra-day chart (09 November 2018)
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Market Commentary 12 November 2018
Markets likely to make cautious start amid mixed Asian cues


Indian equity benchmarks ended the volatile day of trade marginally in red on Friday, as traders remained on sidelines ahead of the Index of Industrial Production (IIP) and Consumer Price Index (CPI) to be released next week. Markets started the session on pessimistic note, as traders remained concerned about Moody's Investors Service's statement that Indian economy will expand 7.4% in 2018, but the growth will slow down to 7.3% in the next year as domestic demand tapers on higher borrowing cost due to rising interest rates. It said the greatest downside risk to India's growth prospects stem from concerns about its financial sector. Market participants also remained cautious with a private report stating that unemployment rate in the country rose to 6.9% in October - the highest in two years. The estimated number of people employed during October 2018 was 397 million. This was 2.4% lower than the rate in October 2017. Meanwhile, the finance ministry said that GST refund of Rs 82,775 crore to exporters has been cleared as on October 31, which is 93.8% of the total such claims with the tax authorities. The ministry said Rs 5,400 crore worth GST refund is still pending with the government and that is being expeditiously processed. However, markets pared all of their losses and turned green in noon deals, as traders took some support from Finance Minister Arun Jaitley's statement that demonetisation helped in tackling black money and expanding the tax base. Sentiments also remained optimistic with a report stating that demonetisation was a fundamental corrective without which the Indian economy would have collapsed by now just like subprime crisis in the US. But, markets once again turned pessimistic and entered into red terrain to end marginally in red, as market participants turned cautious with a private report stating that slowdown in Non-Banking Financial Companies (NBFC) disbursements could have a negative impact on growth. It also said if this situation persists there will be a negative impact on growth because credit availability is going to be that much reduced for the aggregate economy. Finally, the BSE Sensex lost 79.13 points or 0.22% to 35,158.55, while the CNX Nifty was down by 13.20 points or 0.12% to 10,585.20.


The US markets ended the Friday's trade in red terrain with major indices ending with a cut of around a percent, as traders remain worried on renewed concerns about the outlook for interest rates on the heels of the Federal Reserve's monetary policy announcement on Thursday. The Fed left interest rates unchanged as widely expected but indicated it remains on track to gradually raise rates despite signs of a slowdown in the pace of growth in business investment. Adding to the concerns about interest rates, the Labor Department released a report showing a much bigger than expected increase in producer prices in the month of October. The Labor Department said its producer price index for final demand climbed by 0.6 percent in October after rising by 0.2 percent in September. The traders had been expecting another 0.2 percent uptick. Excluding food and energy prices, core producer prices still rose by 0.5 percent in October after edging up by 0.2 percent in September. Core prices had been expected to rise by another 0.2 percent. Compared to the same month a year ago, producer prices in October were up by 2.9 percent, reflecting acceleration from the 2.6 percent increase in September. Meanwhile, the annual rate of growth in core consumer prices also accelerated modestly to 2.6 percent in October from 2.5 percent in September. A separate report from the University of Michigan showed a slight deterioration in consumer sentiment in the month of November. The report said the consumer sentiment index edged down to 98.3 in November from the final October reading of 98.6. Street had expected the index to dip to 98.0. Dow Jones Industrial Average declined 201.92 points or 0.77 percent to 25,989.30, Nasdaq fell 123.98 points or 1.65 percent to 7,406.90 and S&P 500 was down by 25.82 points or 0.92 percent to 2,781.01.


Extending southward journey for tenth straight session, crude oil futures ended lower on Friday, as rising output and fears of a drop in crude demand due to economic slowdown weighed on the commodity once again. Higher output and the Trump administration's decision to soften its sanctions on Iran by allowing eight top crude importers including India and China, to temporarily continue buying Iranian oil, are the significant factors behind oil's slide. Additionally, a slowdown in global economic growth, triggered by US-China trade disputes has raised concerns that oil demand will see a notable drop in the near term. Benchmark crude oil futures for December fell 48 cents or 0.8 percent to settle at $60.19 a barrel on the New York Mercantile Exchange. January Brent crude declined 47 cents or 0.7 percent to settle at $70.18 a barrel on London's Intercontinental Exchange.


Extending gains for the second straight session, Indian rupee ended considerably stronger against dollar on Friday, on account of selling of American currency by banks and exporters amid softening crude oil prices. Traders took encouragement with Finance Minister Arun Jaitley's statement that demonetisation helped in tackling black money and expanding the tax base. Demonitisation is a key step in a chain of important decisions taken by the Government to formalise the economy. Traders shrugged off Moody's Investors Service's report that Indian economy will expand 7.4% in 2018, but the growth will slow down to 7.3% in the next year as domestic demand tapers on higher borrowing cost due to rising interest rates. On the global front, dollar gained versus the euro and sterling on Friday as the US Federal Reserve kept interest rates steady but reaffirmed its monetary tightening stance, setting the stage for a rate hike in December. Finally, the rupee ended at 72.50, 50 paise stronger from its previous close of 73.00 on Tuesday.


The FIIs as per Friday'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 4016.71 crore against gross selling of Rs 4288.11 crore, while in the debt segment, the gross purchase was of Rs 276.38 crore with gross sales of Rs 123.11 crore. Besides, in the hybrid segment, the gross selling was of Rs 0.09 crore against no buying.


The US markets ended sharply lower on Friday on renewed concerns about the outlook for interest rates on the heels of the Federal Reserve's monetary policy announcement on Thursday. Asian markets were trading mixed on Monday, as investors fretted about the outlook for global growth. Indian markets ended Friday's choppy trading session in red territory with marginal cut, led by a fall in information technology (IT) and metal stocks amid weak global cues as the US Fed hinted at a rate hike next month. Today, the markets are likely to make cautious start ahead of macro-economic data amid mixed Asian cues. Market-men will be eyeing the macro economic data of industrial production and consumer price inflation to be released after the market hours. Traders will be concerned with former RBI Governor Raghuram Rajan's statement that demonetisation and the Goods and Services Tax (GST) are the two major headwinds that held back India's economic growth last year, and asserted that the current 7% growth rate is not enough to meet the country's needs. There will be some cautiousness with Federation of Indian Export Organisation (FIEO) President Ganesh Gupta's statement that exports of over half of the 30 sectors closely monitored by the Commerce Ministry were in the negative zone in September. Overall exports in September were contracted by 2.15% to $27.95 billion mainly due to the base impact. However, he expressed hope that the export growth would be better in the coming months as the order books are healthy. Traders may take note of a report that former vice-chairman of Niti Aayog Arvind Panagariya has cautioned that the recent government move to raise import duties on a host of products in a bid to contain current account deficit (CAD) can be counter-productive and does not augur well for the economy. Meanwhile, the SEBI has shortlisted seven firms, including Wipro and L&T Infotech, to build a private data storage cloud, automate its inspection of brokers and enhance analytics capabilities, as the regulator is eyeing a technological leap in surveillance and investigation functions. There will be some buzz in auto sector stocks with the Society of Indian Automobile Manufacturers' (SIAM) data showing that domestic passenger vehicle sales rose 1.55% to 2,84,224 units in October as against 2,79,877 units in the same month last year. also, there will be some reaction in sugar sector stocks with report that saddled with surplus stock, sugar mills in India have contracted to export about 8,00,000 tonnes of the sweetener so far to countries like Middle East and Sri Lanka.


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  • Mahindra & Mahindra has acquired 100% stake in Mahindra Automotive Mauritius on November 06, 2018. 
  • Reliance Industries has raised Rs 3,000 crore through a privately placed debenture issue. 
  • Infosys and Nokia have formed an alliance to develop solutions powered by new-age technologies like artificial intelligence and machine learning. 
  • GAIL India has awarded contract for the purchase of 616 km of line pipe worth Rs 1,100 crore for the Barauni - Guwahati pipeline.
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