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NSE Intra-day chart (12 December 2018)
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Market Commentary 13 December 2018
Markets to make optimistic start on supportive global cues


Key Indian equity benchmarks geared up on Wednesday to end the trading session with plenty of gains i.e. 1.79%, ahead of macro-economic data of industrial production and consumer price inflation to be released after the market hours. The start of day was cheerful, aided by reports that the Reserve Bank will infuse Rs 10,000 crore into the market through open market operations (OMOs) on December 13. Adding some enthusiasm on the street, Industry body CII said that the appointment of former bureaucrat Shaktikanta Das as the new Reserve Bank of India (RBI) Governor comes as a huge sentiment booster to the industry and expressed confidence that he will take urgent steps to address the liquidity squeeze in economy. Das was appointed as the new governor of the RBI, a day after his predecessor Urjit Patel's resignation. Domestic sentiments also got boost, with another report stating that markets regulator SEBI will discuss a slew of measures at its board meeting on December 12 for expanding its offer for sale framework to more companies, relax its norms for clubbing of investment limits by established foreign investors and tighten insider trading rules. In the second half of the session, the markets gained traction to reach their intraday high points, tracking really in global markets. The markets participants remained encouraged, as Asian Development Bank (ADB) retained Indian growth forecast at 7.3 percent for the current fiscal and 7.6 percent for the next financial year 2019-20, amid rebounding exports and higher industrial & agricultural output. Separately, CII said that the government should consider permitting 100% foreign direct investment. Further, the street were seen taking note of Fitch Ratings' statement that the resignation of Urjit Patel as Reserve Bank Governor highlights the risks to RBI's policy priorities and increased government influence on the central bank could undermine the efforts to address bad loan problems. The markets overlooked report that the government has detected GST evasion worth Rs 12,000 crore in 8 months till November. Finally, the BSE Sensex surged 629.06 points or 1.79% to 35,779.07, while the CNX Nifty was up by 188.45 points or 1.79% to 10,737.60.


The US markets ended higher on Wednesday as traders keep up hope that the US and China will make progress on resolving their trade dispute. The strength on markets came in after President Donald Trump expressed optimism about striking a trade deal with Chinese President Xi Jinping. Trump noted that trade talks between US and Chinese officials were underway by telephone and suggested more meetings are likely. Moreover, he said If it is necessary, I will have another meeting with President Xi, who I like a lot and get along with very well. Further, Trump said he could potentially intervene in the arrest of Huawei Technologies Company's chief financial officer Meng Wanzhou, offsetting concerns her detention could hurt trade negotiations. Meng was arrested in Canada, where she faces possible extradition, at the behest of the US over allegations she had lied to banks about Huawei's connections with another firm that did business with Iran. On the economic front, with a sharp pullback in gasoline prices offsetting increases in other prices, the Labor Department released a report showing consumer prices came in flat in the month of November. The report said the Labor Department's consumer price index was unchanged in November after rising by 0.3 percent in October. The unchanged reading matched street estimates. The report said energy prices tumbled by 2.2 percent in November after jumping by 2.4 percent in October, as gasoline prices plunged by 4.2 percent after surging up by 3.0 percent in the previous month. The Labor Department said the steep drop by the gasoline index was offset by increases in an array of indexes, including shelter and used cars and trucks. Dow Jones Industrial Average surged 157.03 points or 0.64 percent to 24527.27, S&P 500 gained 14.29 points or 0.54 percent to 2651.07 and Nasdaq was up by 66.48 points or 0.95 percent to 7098.31.


Crude oil futures ended marginally lower on Wednesday after US government data showed domestic crude supplies declined for a second week in a row, but by much less than the market expected. The Energy Information Administration (EIA) reported that US crude supplies fell by 1.2 million barrels for the week ended December 7. Supplies had also declined the week before, marking the first weekly decline in 11 weeks. However, market participates, on average, expected to see a larger decline of 2.8 million barrels in crude supplies. Benchmark crude oil futures for January dropped 50 cents or 1percent to settle $51.15 a barrel on the New York Mercantile Exchange. February Brent crude lost 5 cents or less than 0.1percent to settle at $60.15 a barrel on London's Intercontinental Exchange.


Indian rupee continued its fall for the third day in a row against the US currency on Wednesday, on increased demand for the American unit from importers. The weakness of the rupee comes amid a strong dollar overseas and a rise in crude oil prices on expectations that an OPEC-led output cut for 2019 would stabilise the supply-demand balance. Market participants paid no heed towards Asian Development Bank (ADB) retaining Indian growth forecast at 7.3 percent for the current fiscal and 7.6 percent for the next financial year 2019-20, amid rebounding exports and higher industrial & agricultural output. On the global front, dollar rose for a third consecutive day on Wednesday as U.S. Treasury yields rose before a Federal Reserve meeting where it is widely expected to raise interest rates for the fourth time this year. Finally, the rupee ended at 72.01, 16 paise weaker from its previous close of 71.85 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 3757.00 crore against gross selling of Rs 6653.66 crore, while in the debt segment, the gross purchase was of Rs 2063.73 crore with gross sales of Rs 2181.41 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.24 crore against gross selling of Rs 0.04 crore.


The US markets rallied on Wednesday as signs of easing trade tensions boosted the outlook for global economic growth. Asian markets were trading in green on Thursday as investors breathed a sigh of relief after British Prime Minister Theresa May survived a no-confidence vote, and as China appeared to be taking more steps to meet US demands to open its markets. Indian markets ended higher on Wednesday, with gains of around two percent, led by across-the-board buying and supportive global cues. Besides, investors reacted positively to the results of assembly elections and the appointment of a new governor for the Reserve Bank of India. Today, the markets are likely to make optimistic start on positive macro-economic data amid supportive global cues. The Central Statistics Office (CSO) in its latest data showed that India's industrial output grew at an 11-month high of 8.1% in October mainly on the back of mining, power and manufacturing sectors coupled with higher offtake of capital as well as consumer durable goods. Industrial production measured in terms of Index of Industrial Production (IIP) grew 1.8% in October 2017. The previous high IIP growth rate was recorded in November last year at 8.5%. Also, India's retail inflation eased to 2.33% in November as compared to 4.88% in November last year and was 3.31% in October. Traders will be getting some encouragement with S&P Global's statement that India's rapid economic growth will be enough to offset worries about the independence of its central bank and keep its credit rating in the coveted investment grade bracket. Traders may take note of report that the government hiked Minimum Support Prices (MSPs) of 22 mandated agricultural crops and Fair & Remunerative Price (FRP) for Sugarcane on the basis of recommendations of Commission for Agricultural Costs & Prices (CACP). Meanwhile, exporters body Federation of Indian Export Organisations (FIEO) urged new Reserve Bank of India (RBI) Governor Shaktikanta Das to ensure smooth flow of credit to the sector as decline in the funds will hit outbound shipments. There will be some buzz in banking sector stocks with rating agency Icra's report that the government is likely to keep its bank recapitalisation target unchanged at Rs 65,000 crore for the current financial year as lenders under RBI's prompt corrective action (PCA) framework will not maintain capital conservation buffers. Also, there will be some reaction in sugar sector stocks with a private report that India's sugar production could fall in 2019/20 as farmers are struggling to plant cane because of a drought in two of the country's top producing states. There will be some buzz coal sector stocks with report that India's coal imports rose by 38.2% to Rs 1,38,477 crore in monetary terms last fiscal. In quantity terms, the coal imports increased 9.1% to 208.27 MT from 190.95 MT.


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  • Wipro has launched an Automotive Innovation Center in Detroit, Michigan. 
  • Tata Motors has launched top of the line variant of its entry level model Tiago priced between Rs 5.57 to 6.38 lakh. 
  • SBI is running pilot projects to disburse agricultural loans digitally and expects to roll out the services very soon. 
  • Indiabulls Housing Finance has raised funds through allotment 2,500 Secured, Redeemable, NCDs of face value Rs 10 lakh each, aggregating to Rs 250 crore.
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