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NSE Intra-day chart (13 August 2018)
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Market Commentary 14 August 2018
Markets likely to make a flat-to-positive start


Indian equity benchmarks ended the Monday's trade in red terrain with frontline gauges settling below their crucial 37,700 (Sensex) and 11,400 (Nifty) levels, amid global sell off. Sentiments remained dampened since beginning as key gauges made a gap-down start 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. Sentiments also remained dampened after Rupee hit its record low of 69.89 per dollar. Traders remained on sidelines ahead of the macro data of retail inflation for July scheduled to be announced post market hours. Sentiments also got hurt with Fitch Ratings' latest report that its outlook on the Indian banking sector is likely to remain negative until the banks address their weak core capital positions against mounting bad loans and poor financial performance. Traders took note of GSTN CEO's statement that the IT backbone of the Goods and Services Tax (GST) was not given enough time to prepare a system to the satisfaction of the GSTN which led to the glitches in the implementation of the new tax regime. The domestic gauges recovered partially from day's bottom in early afternoon deals but hovered in negative territory as investors shrugged off 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. Market participants paid no heed towards 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. The traders overlooked CII-ASCON Industry Survey report highlighting that India's economic growth will improve further in the coming quarters due to recovery in domestic demand as also the investment cycle. The demand and investment will be supported by better consumption patterns on account of favourable monsoon, moderation in inflation and the onset of festive season. Finally, the BSE Sensex shed 224.33 points or 0.59% to 37,644.90, while the CNX Nifty was down by 73.75 points or 0.65% to 11,355.75.


The US markets ended lower on Monday on lingering concerns about the Turkish economy and the recent sell-off by the country's currency. The Turkish lira hit a new record low against the US dollar in Asian trading before regaining some ground after Turkey's central bank took measures to boost liquidity in the foreign exchange market. Turkey's central bank tried to assuage global investors' fears on Monday, stating it will provide as much liquidity as needed to the country's banks. The central bank also said it will keep monitoring the situation closely. The Turkish economy has been reeling recently as its inflation rate reached 16% last month, well above the central bank's 5% target. The Turkish lira, which briefly tumbled more than 20% on Friday, reached a fresh record low on Monday before regaining some footing. Tensions between the US and Turkey increased last week after a Turkish delegation returned from Washington with no apparent progress on the detention of US pastor Andrew Brunson, who is charged with supporting a group blamed for an attempted coup in 2016. While the US does not have much direct economic exposure to the country, instability in the region sparked concerns that its problems could spill over to other parts of the world, exacerbating the uncertainty surrounding trade relations between the US and its major trading partners. Trading activity remained somewhat subdued, however, with a lack of major US economic data keeping some traders on the sidelines. Dow Jones Industrial Average declined 125.44 points or 0.50 percent to 25187.70, the S&P 500 lost 11.35 points or 0.40 percent to 2821.93 and Nasdaq was down by 19.40 points or 0.25 percent to 7819.71.


Crude oil futures ended lower on Monday after tumbling sharply on expectations for an increase in crude stocks at the delivery hub for US futures and data showing a pickup in production by the Organization of the Petroleum Exporting Countries (OPEC). The OPEC said production by cartel members rose by 41,000 barrels a day in July even as output by Saudi Arabia fell. Moreover, Turkey's currency crisis appeared to put some indirect pressure on US oil futures on Monday. Turkey's currency dropped again on Monday, sending shock waves through other emerging markets. Benchmark crude oil futures for September declined 43 cents or 0.6 percent to settle at $67.20 a barrel on the New York Mercantile Exchange. October Brent crude fell $1.49 or 0.3 percent at $72.61 a barrel on London's Intercontinental Exchange.


Extending weakness for the third day, Indian rupee slumped to a fresh record low against the US dollar on Monday, as emerging-market currencies weakened amid concern over the risk of contagion from Turkey's financial-market turmoil.  Increased demand for the US currency from importers and banks amid fresh foreign fund outflows mainly hit the rupee sentiment. Traders also appeared cautious ahead of the macro data of retail inflation for July scheduled to be announced post market hours. Market participants paid no heed towards CII-ASCON Industry Survey report which highlighted that India's economic growth will improve further in the coming quarters due to recovery in domestic demand as also the investment cycle. The demand and investment will be supported by better consumption patterns on account of favourable monsoon, moderation in inflation and the onset of festive season. Finally, the rupee ended at 69.91, Rs 1.08 weaker from its previous close of 68.83 on Friday.


The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5496.16 crore against gross selling of Rs 4163.75 crore, while in the debt segment, the gross purchase was of Rs 652.20 crore with gross sales of Rs 288.10 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.23 crore against gross selling of Rs 1.04 crore.


The US markets ended lower on Monday as the ongoing turmoil in Turkey dampened investors' appetite for riskier assets. Asian markets were trading mixed in early trade on Tuesday as the contagion from the economic crisis in Turkey remained relatively contained in developed markets overnight. Indian equity markets ended lower for the second straight session on Monday as the Indian rupee hit life-time lows and the Turkish currency crisis dealt a blow to investors' sentiment globally. Today, the markets are likely to make a positive start on good macro-economic data. The Central Statistics Office's (CSO) data showed that India's Retail inflation fell to nine-month low of 4.17% in July on account of slowdown in prices of vegetables and fruits. Its previous low was in October 2017 at 3.58%. Retail inflation, measured by Consumer Price Index (CPI) had hit a five-month high of 5% in June. Besides, traders will be eyeing another macro data of wholesale price inflation for July scheduled to be release later in the day. Also, there will be some support with a private report that India's foreign reserves are in a comfortable range and another 5-8% fall in reserves will not jeopardise the situation. However, there will be some cautiousness with the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry's data showing that India' fuel demand rose 7.3% in July, driven by sharp rise in petrol and diesel consumption. Fuel consumption in July totaled 17.05 million tonnes as compared to 15.88 million tonnes in the same month last year. There will be some buzz in the aviation related stocks with ASSOCHAM's statement that the aviation sector which was showing an immense promise till about a year ago, is facing head winds with most of the airlines battling a survival issue, hit by rising fuel costs and other expenses even as a cut - throat competition is making the aviation firms bleed. There will be lots of important earnings announcements too, to keep the markets in action.


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Coal India






  • SBI will sell two NPAs worth about Rs 2,490 crore and has invited bids for them. 
  • L&T's construction arm -- L&T Construction's Buildings & Factories Business has bagged an EPC order worth Rs 3,028 crore from GHIAL. 
  • IOC is planning to invest Rs 20,000 crore in city gas distribution projects in next 5-8 years as it bets big on gas business to complement its traditional oil refining and marketing business. 
  • Hero MotoCorp is set to commence country-wide sales of its new premium motorcycle Xtreme 200R, with dispatches from its factories starting next week.
News Analysis