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NSE Intra-day chart (10 August 2018)
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Market Commentary 13 August 2018
Markets to make gap-down opening amid weak global cues


Indian equity benchmarks ended the Friday's trade in red terrain, snapping their two days record winning streak, with frontline gauges breaching their crucial 37,900 (Sensex) and 11,450 (Nifty) levels. Sentiments remained dampened since morning, as key gauges made a pessimistic start with traders remained on sidelines ahead of industrial production data for June scheduled to be announced post market hours. Investors also remained cautious after data released by the India Meteorological Department (IMD) showed that 39% of the 681 districts in India have received less than normal rainfall in the week ended August 8. Selling got intensified in last leg of trade on account of selling in banking stocks led by sharp selloff in State Bank of India (SBI) after the bank reported a consolidated net loss of Rs 4,230.44 crore for the quarter ended June 30, 2018, as compared to net profit of Rs 3,031.88 crore for the same quarter in the previous year. On standalone basis, the bank reported a net loss of Rs 4,875.85 crore for the quarter under review as compared to a net profit of Rs 2,005.53 crore for the same quarter in the previous year. Traders paid no heed towards a private report stating that the production and manufacturing sector saw a 60% rise year-on-year (Y-o-Y) in recruitment in July. Market participants failed to get any sense of relief with the Lok Sabha passing four bills to amend the GST law, as Finance Minister Piyush Goyal said lower tax rates will improve compliance and enhance revenue collection. He said tax collection will not come down despite reduction in taxes as he allayed the concerns to that effect raised by some members and added that the lower rates will rather improve compliance and enhance revenue collection. Meanwhile, the Securities and Exchange Board of India (SEBI) in its annual report for 2017-18 has said that it is planning to put in place measures to curb insider trading and misuse of unpublished price-sensitive information through timely announcements by listed companies. Finally, the BSE Sensex shed 155.14 points or 0.41% to 37,869.23, while the CNX Nifty was down by 41.20 points or 0.36% to 11,429.50.


The US markets ended lower on Friday with the losses of over half a percent, amid concerns about rising tensions between the US and Turkey on account of the Turkish detention of US pastor Andrew Brunson. The Turkish lira has shown a sharp decline to a record low, contributing to considerable weakness in the overseas markets. Turkish President Recep Erdogan has urged Turks to sell dollars and gold and buy the lira. President Donald Trump subsequently announced that he has authorized the doubling on steel and aluminum tariffs on Turkey. Trump stated I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar. Further, he added Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time. On the economic front, the Labor Department released a report showing a modest increase in consumer prices in the month of July. The Labor Department said its consumer price index rose by 0.2% in July after inching up by 0.1% in June. The increase in prices matched street estimates. The index for shelter rose by 0.3% in July and accounted for nearly 60% of the increase by the consumer price index. Excluding food and energy prices, the core consumer price index also edged up by 0.2% in July, matching the increases seen in the two previous months as well as expectations. Along with the shelter index, the indexes for used cars and trucks, airline fares, new vehicles, household furnishings and operations, and recreation all increased. Dow Jones Industrial Average dropped 196.09 points or 0.77 percent to 25313.14, the S&P 500 declined 20.30 points or 0.71 percent to 2833.28 and Nasdaq was down by 52.67 points or 0.67 percent to 7839.11.


Crude oil futures ended higher on Friday as a forecast for rising global crude demand, and supply boosts from Russia, offset lingering concerns about trade tensions cutting global consumption of energy products. The International Energy Agency (IEA) raised its forecast for global oil demand growth by 110,000 barrels a day to 1.5 million barrels for 2019. Its monthly report also said global supply had risen by 300,000 barrels a day last month, mainly because of higher output from Russia and higher output from the Organization of the Petroleum Exporting Countries. Meanwhile, the number of active US rigs drilling for oil increased by 10 to 869 for the week, coming after the report showed a decline of 2 in the earlier period. Benchmark crude oil futures for September surged 82 cents or 1.2 percent to settle at $67.63 a barrel on the New York Mercantile Exchange. October Brent crude rose 74 cents or 1 percent at $72.81 a barrel on London's Intercontinental Exchange.


Piling on yesterday's loss, Indian rupee weakened further against the American currency on Friday on heavy dollar demand from corporates and importers. This is the second consecutive session when the rupee is traded lower against dollar. Sentiments remained down-beat with the India Meteorological Department's (IMD) latest report stating that 39% of the 681 districts in India have received less than normal rainfall in the week ended August 8. Investors have maintained cautious approach ahead of Index of Industrial Production (IIP) data for June scheduled to be released today. Besides, a weak trend at Dalal Street too weighed on the rupee. On the global front, euro sank to its lowest levels in more than a year on Friday after a report that the European Central Bank (ECB) was growing concerned about the exposure of banks to a dramatic slide in the Turkish lira. Finally, the rupee ended at 68.83, 15 paise weaker from its previous close of 68.68 on Thursday.


The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 3871.19 crore against gross selling of Rs 3457.04 crore, while in the debt segment, the gross purchase was of Rs 1872.64 crore with gross sales of Rs 287.18 crore. Beside, in the hybrid segment, the gross buying was of Rs 0.08 crore against gross selling of Rs 0.68 crore.


The US markets ended lower on Friday, amid concerns over the ongoing slide of the Turkish liraand fears the country's economic and political crisis could spread to Europe and elsewhere. Asian markets were trading in red on Monday as a renewed rout in the Turkish lira drove demand for safe harbours, including the US dollar, Swiss franc and yen. Indian equity markets ended lower on Friday, after touching record highs in the previous session, following weak trend in global markets. Today, the markets are likely to make gap-down opening on Monday, amid subdued global cues following a slump in the Turkish lira, as US President Donald Trump doubled steel and aluminum tariffs on Turkey, raising concerns the country may plunge into a financial crisis. Traders will be eyeing the macro data of retail inflation for July scheduled to be announced post market hours. However, traders will be getting some encouragement later in the trade, with report that India's industrial output recorded a five-month high growth of 7% in June as against 3.9% in May, as production of consumer durables and capital goods picked up pace ahead of festival season. There will be some support with report that foreign investors have pumped in over Rs 8,500 crore into the Indian capital markets in the last eight trading sessions on improvement in crude oil prices, stabilising rupee and better corporate earnings. Traders will also be reacting on report that India's economic growth will improve further in the coming quarters due to recovery in domestic demand as also the investment cycle. There will be some buzz in the Steel sector stocks with Joint Plant Committee's (JPC) latest report showing that India's crude steel output grew 6% to 8.73 million tonne (MT) during July 2018, as compared to 8.22 MT crude steel produced during the same month a year ago. There will be some cautiousness in the power sector stocks, with Crisil's latest report that India will not be able to achieve its ambitious target of generating 100GW solar power by 2022.



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Tata Motors






  • Tata Motors' wholly owned subsidiary -- JLR has reported total retail sales of 36,144 vehicles in July 2018, down 21.6% year on year, primarily reflecting transitional issues in certain markets. 
  • HDFC Bank has entered into strategic partnership with PayPal to offer safer, faster and more convenient payment experiences for its card holders and help drive digital spend. 
  • IndusInd Bank has incorporated a wholly owned subsidiary company namely, IndusInd Financial Inclusion on August 6, 2018. 
  • SBI has reported consolidated net loss after minority interest of Rs 4,230.44 crore for Q1FY19 as compared to net profit of Rs 3,031.88 crore for Q1FY18.
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