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NSE Intra-day chart (14 November 2017)
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Market Commentary 15 November 2017
Markets to see a negative start amid weak global cues

Indian equity benchmarks ended the lackluster day of trade in red terrain on Tuesday with frontline gauges breaching their crucial 33,000 (Sensex) and 10,200 (Sensex) levels, as traders remained concerned with retail inflation accelerating more than expected in October. Inflation quickened to 3.58 percent in the month, the fastest pace in seven months, from 3.28 percent increase in September. Consumer inflation rise was mainly due to an increase in prices of consumer food items. The inflation data showed that the Consumer Food Price Index (CFPI) - an indicator for food prices - also rose to 1.90% in October from 1.25% in September. Traders also remained cautious with rising crude prices and tax relief on some items under the Goods and Services Tax (GST) which is expected to threaten the government's fiscal targets on back of possible dip in revenues. Giving hint of further rationalization of GST rates, Finance Minister Arun Jaitley has said that there is scope for further rationalization of GST rates and revenue buoyancy will decide the course of rationalization. The rising crude will also prevent the Reserve Bank of India from cutting interest rates any further. Markets tried to recoup their losses in second half of trade but selling in dying hour of trade dragged markets near intraday lows, as sentiments turned down-beat after India's inflation on wholesale level picked up in the month of October due to increase in prices of food and fuel products. According to the latest data released by the government, the wholesale price inflation (WPI) climbed to 3.59% in October 2017 from 2.60% in September 2017 and 1.27% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.03% compared to a build up rate of 3.53% in the corresponding period of the previous year. Investors failed to get any sense of relief with a private report that business confidence in the country during the ongoing quarter has improved on account of government measures, macroeconomic boost and festive season demand, among others. The index stood at 76.7 during October-December of 2017, an increase of 6.4% from the preceding three months. The index, however, fell 4.1% against the corresponding three months a year ago. Finally, the BSE Sensex declined 91.69 points or 0.28% to 32,941.87, while the CNX Nifty was down by 38.35 points or 0.38% to 10,186.60.


The US markets closed lower on Tuesday, with Wall Street slumping in the face of uncertainty around efforts to overhaul tax policy and a downturn in crude-oil futures. The Dow and S&P 500 finished in negative territory for three out of the past four trading sessions, suggesting that a run to records may be cooling somewhat, as investors fret about tax reform and equity valuations. On the economy front, sentiment among small-business owners rose in October as the promise of tax reform buoyed expectations for sales and growth. The optimism tracker from the National Federation of Independent Business rose to 103.8 from 103. In October, four of the index's sub-gauges rose, five declined, and one was unchanged. Separately, the producer price index rose 0.4% in October. Another measure, known as core PPI, rose 0.2% for the third straight month. The core rate strips out food, energy and trade margins. The Dow Jones Industrial Average lost 30.23 points or 0.13 percent to 23,409.47, the Nasdaq dropped 19.723 points or 0.29 percent to 6,737.87, and the S&P 500 edged lower by 5.97 points or 0.23 percent to 2,578.87.


Crude oil futures plunged on Tuesday to settle near two-week lows after the International Energy Agency (IEA) revised down its forecast for global demand growth and said it expects U.S producers to ramp up output. The IEA cut its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and 2018, to an estimated 1.5 million bpd and 1.3 million bpd, respectively, as warmer temperatures were expected to weigh on consumption while rising output might add to glut in the crude supplies. Traders largely overlooked the other report that that OPEC member compliance with deal to curb output improved, rising to 96% in October from 87% in September. Benchmark crude oil futures for December delivery ended lower by $1.05 at $ 55.71 a barrel on the New York Mercantile Exchange. Brent crude for January delivery was down by 1.47 percent to $62.23 a barrel on the ICE.


Indian rupee ended flat against US dollar on Tuesday, as traders remained cautious on the back of higher Wholesale Price Index (WPI) data. India's wholesale inflation grew to 3.59% during October, higher from 2.6% in September, due to increase in prices of food and fuel products. Some concern also came with data showing that India's retail inflation accelerated to seven-month high of 3.58% in the month of October 2017, as compared to 3.28% in September 2017, due to an increase in prices of consumer food items. However, the domestic currency recovered from initial losses, taking support from a private report that India is likely to achieve strong growth over the next decade and will overtake Japan in nominal GDP by 2028, to emerge as the world's third largest economy. On the global front, Pound slumped against dollar on Tuesday after October inflation data showed price pressures stalling in the UK, easing pressure on Bank of England policymakers for further interest rate hikes. Finally, the rupee ended unchanged from its previous close of 65.42 on Monday.


The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4632.82 crore against gross selling of Rs 4768.55 crore, while in the debt segment, the gross purchase was of Rs 2263.31 crore with gross sales of Rs 2648.67 crore.


The US markets despite coming off their worst level of the day ended in red in the last session on lingering uncertainty about the outlook for the Republican tax reform proposal, as the House prepares to vote on their bill later this week. The Asian markets have made mostly a soft start and some of the indices are down by over half a percent as concern grows that stocks have become too expensive amid uncertainty about US tax reform. Signs of an oversupply in commodities have led to fall in the commodities stocks in the region. The Indian markets continued their slide and lost over a quarter percent in the last session, traders were concerned with likely fiscal slippages on rising crude prices and upward pressure on both consumer and wholesale inflation. Today, the start is likely to remain weak and the sluggishness will extend amid negative global cues. On the domestic front traders will be concerned with trade deficit widening to its highest in nearly three years in October, as export growth contracted for the first time after more than a year. The trade deficit widened to $14.02 billion last month from $8.98 billion in September. Merchandise exports for October fell 1.12 percent from a year earlier to $23.1 billion, dropping for the first time since August 2016. There will be buzz in the market with report that government could be looking to come out with detailed anti-profiteering guidelines. The broad idea is to prescribe a methodology to ascertain whether companies are passing on GST reductions and benefits derived from input tax credits to consumers. The realty sector stocks will see some action with industry body Assocham stating that if the real estate sector is brought within the ambit of GST, it should be along with the stamp duty and moderate rate, and should not add to the cost of housing and construction. There will be lots of important earnings announcements to keep the markets buzzing.


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  • IOC is aiming to commission the polypropylene facility, the first unit of its proposed petrochemical complex at Paradip, by June 2018.
  • Tech Mahindra has entered into a strategic partnership with Toshiba Digital Solutions to work in the area of a smart factory.
  • Coal India's average loading of rakes per day stood at 208.8 during July-September 2017 quarter, up by 7% compared to 195.2 rakes per day on a same quarter comparison of last year.
  • M&M has entered into a licencing agreement with the Dewulf group for manufacture and marketing of potato planting equipment in India.
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