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NSE Intra-day chart (10 May 2019)
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Market Commentary 13 May 2019
Markets to make a negative start of the new week


Friday turned out to be yet another lousy day for Indian equity markets, with the Sensex and the Nifty closing lower by around 100 and 25 points, respectively. Key indices made a positive start of the day, as Engineering exporters' apex body Engineering Export Promotion Council of India (EEPC) urged the Reserve Bank of India (RBI) to facilitate easy and cheaper bank loans mainly for the Micro, Small, and Medium Enterprises (MSMEs). EEPC also recommended that the banks should not ask for external credit rating as they are doing internal rating and banks be advised not to charge loan application processing and credit limit renewal fee. Sentiments were also optimistic with Corporate Affairs Secretary Injeti Srinivas' statement that the corporate affairs ministry maintained a fairly reliable database that is not a black box. He emphasized that it is up to statistical authorities to decide on which data is representative for GDP calculation. However, markets soon turned volatile to settle the day in red terrain, amid reports that India inflation likely crept up slightly to a six-month high in April, driven mainly by food prices, although holding below the Reserve Bank of India's medium-term target of 4 percent for the ninth straight month. Market participants also got worried, as the International Monetary Fund (IMF) warned that trade tensions and the exchange of tariffs between the United States and China pose a threat to the global economy. Some worries also came with the Association of Mutual Funds in India's (AMFI) data report stating that net inflows into equity mutual funds plunged 61 per cent to Rs 4,609 crore in April compared to the previous month, as volatility in stock markets and uncertainty over the outcome of general elections impacted investor sentiments. In March, net inflows into equity funds stood at Rs 11,756 crore. Finally, the BSE Sensex slipped 95.92 points or 0.26% to 37,462.99, while the CNX Nifty was down by 22.90 points or 0.20% to 11,278.90.


The US markets ended higher on Friday after key negotiators cast a positive glow on trade talks. US Secretary of Treasury Steven Mnuchin indicated that bilateral talks were constructive even though an agreement was not reached. Meanwhile, President Donald Trump said conversations with China over trade will continue and his relationship with President Xi Jinping remains strong. However, the US hiked the tariff on $250 billion worth of Chinese goods from 10 percent to 25 percent after the US and China failed to reach a trade deal. The US increased tariffs as of 12:01 Eastern time Friday, with Beijing vowing to retaliate. Additionally, Trump noted that the process has begun to place tariffs on the remaining $325 billion worth of Chinese imports. On the economic front, Consumer prices in the US increased by slightly less than anticipated in the month April, according to a report released by the Labor Department. The Labor Department said its consumer price index rose by 0.3 percent in April after climbing by 0.4 percent in March. Street had been expecting another 0.4 percent increase. Energy prices showed another substantial increase during the month, surging up by 2.9 percent in April after jumping by 3.5 percent in March. A 5.7 percent spike in gasoline prices account for over two-thirds of the increase by the headline index. Excluding food and energy prices, core consumer prices inched up by 0.1 percent for third consecutive month compared to economist estimates for a 0.2 percent uptick. Higher prices for shelter, medical care, education, and new vehicles more than offset significant decreases in prices for used cars and trucks and apparel. Compared to the same month a year ago, consumer prices in April were up by 2.0 percent, reflecting a modest acceleration from the 1.9 percent growth in March. The annual rate of growth in core consumer prices also crept up to 2.1 percent in April from 2.0 percent in the previous month. Dow Jones Industrial Average surged 114.01 points or 0.44 percent to 25942.37, Nasdaq gained 6.35 points or 0.08 percent to 7916.94 and S&P 500 was up by 10.68 points or 0.37 percent to 2881.40.


Crude oil futures ended marginally lower on Friday as escalation in the trade war has put a return in global growth worries, which would translate to softer crude demand. The Trump administration early Friday increased tariffs on $200 billion in Chinese imports, and Beijing has vowed to retaliate. US and Chinese officials continued negotiations Friday in Washington but did not produce a deal. However, Brent crude ended higher as traders continued to watch growing tensions between the US and Iran, which could disrupt Middle East output and drive oil prices higher. Benchmark crude oil futures for June dropped 4 cents or 0.1 percent to settle at $61.66 a barrel on the New York Mercantile Exchange. However, July Brent crude gained 23 cents or 0.3 percent to settle at $70.62 a barrel on London's Intercontinental Exchange.


Snapping two days depreciating streak, Indian rupee ended marginally higher against dollar on Friday, as bankers and exporters took to selling of American currency. Traders took note of Corporate Affairs Secretary Injeti Srinivas' statement that the corporate affairs ministry maintained a fairly reliable database that is not a black box. He emphasized that it is up to statistical authorities to decide on which data is representative for GDP calculation. However, most of the gains were trimmed as anxiety remained among the traders ahead of index of industrial production (IIP) data for March scheduled to be released today. On the global front, dollar was steady against the safe-haven Japanese yen on Friday, taking in stride the hike in U.S. tariffs on Chinese goods that went into effect and awaiting resumption of talks between top officials of the world's two largest economies. Finally, the rupee ended at 69.92, 2 paise stronger from its previous close of 69.94 on Thursday.


The FIIs as per Friday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 5110.71 crore against gross selling of Rs 5660.11 crore, while in the debt segment, the gross purchase was of Rs 2522.82 crore with gross sales of Rs 2637.13 crore. Besides, in the hybrid segment, the gross buying was of Rs 12.15 crore against gross selling of Rs 11.61 crore.


The US markets ended higher on Friday after Treasury Secretary Steven Mnuchin wrapped up a second day of trade talks, calling the discussions constructive. Asian markets traded lower in early deals on Monday  on growing uncertainty over whether the United States and China will be able to reach a deal to end their trade war after Washington sharply hiked tariffs. The markets registered eighth consecutive day fall on Friday, with Nifty ending below 11,300, as global markets remained under pressure. Today, the start of the session is likely to be on negative side following subdued other Asian markets, amid growing uncertainty over US-China trade talks. Investors will be looking ahead to macroeconomic data such as Consumer Price Index (CPI) to be announced after the market hours.  Traders will remain concern aster The Ministry of Statistics and Programme Implementation data has showed that industrial production in volume terms declined in March for the first time in 21 months - by 0.1 per cent - against a growth rate 0.1 per cent in the previous month as manufacturing continued to contract for the second month in a row and mining growth was muted. The March numbers pulled down the index of industrial production (IIP) to 3.6 per cent in 2018-19 against 4.4 per cent in the previous year. There will be some cautiousness too with a recent technical study by the National Sample Survey Office (NSSO) for July 2016 – June 2017 on the services sector enterprises has again raised questions about India's national income data & quality of the country's growth estimates. However, traders may take some support later in the day on report that in an attempt to bring down the compliance burden on companies, especially the small and medium enterprises (SMEs), the commerce ministry has urged the ministry of corporate affairs (MCA) to explore avenues where firms can opt for self-certifying their returns as well as clubbing all the returns to be filed in a year into a single annual return. There will be some buzz in the Steel stocks after the government has decided to set up a committee under the Director General of Foreign Trade (DGFT) to look into availability of steel at competitive prices for engineering goods exporters. The committee will submit its report to steel and commerce ministries within two months. It will suggest measures which will be a win-win situation for both steel producers and engineering exporters.  Also, the banking stocks will keep buzzing with the Reserve Bank of India's (RBI) report that the slowdown in bank deposit growth in the recent period alongside a revival of credit demand raised concerns about a structural liquidity gap in the system, possibly amplified by substitution effects of small savings and mutual funds on bank deposits in the aftermath of demonetization.


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  • Bajaj Auto has launched a new version of its Avenger Street 160 model equipped with anti-lock braking system priced at Rs 82,253.
  •  Tata Motors' wholly owned subsidiary -- JLR has reported retail sales of 39,185 vehicles in April 2019, down by 13.3% compared to April 2018.
  •  M&M has launched an all new entry level ‘W3 Variant' of its popular SUV, the Plush XUV500 at a price of Rs 12.22 lakh.
  •  Bajaj Finance, the lending arm of Bajaj Finserv, is back with the second phase of ‘EMI Network Powerplay' contest.
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