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NSE Intra-day chart (13 December 2017)
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Market Commentary 14 December 2017
Markets to make a cautious start on mixed regional cues

Extending previous session butchery, Indian equity benchmarks once again ended the session with a cut of around half a percent, breaching their crucial 10,200 (Nifty) and 33,100 (Sensex) levels. Markets started the session on pessimistic note with traders reacting negatively to the macro economic data. Sentiments remained dampened after the industrial production growth hit a three-month low of 2.2% in October this year, mainly due to subdued performance of manufacturing and mining sectors coupled with a contraction in output of consumer durables. The IIP grew 4.14% in September this year. Industrial output rose by a meager 2.5% in April-October this fiscal as compared to 5.5% in the same period of 2016-17. Moreover, consumer inflation rose to 4.88% in November from 3.58% in October and 3.63% in the year earlier, exceeded the RBI's forecast of 4.2-4.6% for the second half of the year. The higher-than-expected retail inflation effectively rules out any rate cuts in the near future by the Reserve Bank of India even as industrial growth remains muted. However, markets took U-turn and entered into green terrain with traders taking support with a private survey report, stating that India is the third most optimistic nation in hiring intentions as 22% of employers are expected to add more staff in the next three months. It further said that workforce gains were expected across all seven industry sectors monitored and in all four regions. Another private report enlightened that the gap between China and India's prosperity has narrowed by four ranks since 2016 and to a quarter of what it was in 2012. The upward trend in India's prosperity is significant in view of the fact that India registered lower gross domestic product (GDP) growth following demonetization and implementation of the GST reform in 2017. But sharp selloff in final hour of trade dragged markets back into negative terrain, as traders opted to book profit at higher levels ahead of Wholesale Price Index (WPI) data to be released tomorrow. Sentiments also weighed down on report that Asian Development Bank (ADB) scaled down its current fiscal year GDP growth forecast for India to 6.7% from prior estimate of 7%.Finally, the BSE Sensex declined 174.95 points or 0.53% to 33,053.04, while the CNX Nifty was down by 47.20 points or 0.46% to 10,192.95.


The US markets closed mostly higher on Wednesday, with the Dow ending at a record for a fourth straight session after the Federal Reserve raised interest rates, as had been widely expected. While the day's gains were broad, a sharp decline in financial shares limited the broader market's advance and pushed the S&P 500 into slightly negative territory in the final minutes of trading. Investors also digested the results of Alabama's Senate election, where Democrat Doug Jones won in an upset victory, defeating controversial Republican Roy Moore. The victory will shrink the Republican Senate majority, leaving the balance at 51-49. That has raised concerns that it will be harder for the Republicans to push through major overhauls, such as tax reform, and that the governing party will struggle in the 2018 midterm elections. Meanwhile, the Federal Reserve lifted a key US interest rate, but the central bank also struck a wait-and-see stance in light of persistently low inflation and a pending change in leadership. The central bank as widely expected raised its benchmark federal funds rate by a quarter percentage point to between 1.25% and 1.5% - the fourth increase in a year. The Dow Jones Industrial Average added 80.63 points or 0.33 percent to 24,585.43, the Nasdaq gained 13.482 points or 0.20 percent to 6,875.80, while the S&P 500 edged lower by 1.26 points or 0.05 percent to 2,662.85.


Crude oil futures declined further on Wednesday, as traders overlooked the data showing crude stockpiles fell for the second straight week; there was concern of a larger-than-expected build in gasoline supplies. The Energy Information Administration (EIA) reported draw of 5.1 million barrels of crude for the week ended Dec. 8. Gasoline inventories rose by 5.7 million barrels, while supplies of distillate fell by about 1.4 million barrels. Benchmark crude oil futures for January delivery ended lower by $0.54 or 1percent at $56.60 a barrel on the New York Mercantile Exchange. Brent crude for February delivery was down by 1.5 percent to $62.42 a barrel on the ICE.


Recouping most of the early losses, Indian rupee ended tad lower against the dollar on Wednesday for the second straight day, on the back of demand of the US currency from importers and banks. A negative set of macroeconomic data weighted down on the rupee sentiments. India's industrial growth in October hit a 3-month low of 2.2%, while retail inflation in November climbed to a 15-month high of 4.88%. Besides, weak domestic stock markets, rise in global crude oil prices and a resurgent dollar against other currencies ahead of the Fed policy announcement later in the day kept the rupee on the edge. On the global front, the dollar slipped against the yen on Wednesday after the Democratic candidate won a bitter fight for a US Senate seat in deeply conservative Alabama, injecting fresh uncertainty about the outlook for the greenback in the coming months. Finally, the rupee ended at 64.44, 4 paise weaker from its previous close of 64.40 on Tuesday.


The FIIs as per Wednesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 6890.61 crore against gross selling of Rs 6089.98 crore, while in the debt segment, the gross purchase was of Rs 1618.35 crore with gross sales of Rs 2656.68 crore.


The US markets ended higher in the last session, and the upward move on the day lifted the Dow and the S&P 500 reached new record highs, as Fed raised its benchmark rate by a quarter percentage point to a target range of 1.25 percent to 1.5 percent, it still doesn't see inflation accelerating. The Asian markets have made a mixed start as the dollar maintained losses after the Federal Reserve raised its outlook for U.S. growth and held its forecast for the number of interest-rate increases next year amid benign inflation. The Indian markets reacting to the weak macro data ended in red in the last session, with major benchmarks slipping from the day's high and deposing around half a percent for the day. Today, the start is likely to remain cautious and traders will be reacting to the US Federal Reserve's decision to raise interest rates by 25 basis points, though it was on expected lines and majorly priced in. On the domestic front traders will be concerned with the Reserve Bank of India (RBI) data showing that India's current account deficit (CAD) widened to 1.2 percent of GDP or $ 7.2 billion in July-September, from 0.6 percent of GDP or $ 3.4 billion reported in the same period a year ago. Meanwhile, the trade deficit widened to $ 32.8 billion in the previous quarter from $ 25.6 billion a year ago. There will be buzz in the India Inc as with the end of RBI's deadline to resolve the 28 large stressed accounts that the regulator had identified on its second list, banks are set to refer as many as 23 of them for insolvency proceedings. The paper stocks will keep buzzing on reports that paper and paperboard imports touched an all-time of 10.5 lakh tonnes in the first half of this fiscal, up 60 per cent from 6.5 lakh tonnes logged in the same period last year. Traders will be eyeing the WPI inflation data too, to be announced later in the day.


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  • UltraTech Cement has started construction on 3.5 MT greenfield cement plant at an investment of around Rs 1,850 crore in the Pali district of Rajasthan.
  • ONGC has sought access to a data room to help fix the price at which it can acquire the government's 51.11 per cent stake in HPCL.
  • Reliance Industries' telecom arm - Reliance Jio Infocomm has added 7.34 million subscribers in October to take its base to 145.96 million.
  • Asian Paints has acquired 100% stake in Reno Chemicals Pharmaceuticals and Cosmetics.
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