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NSE Intra-day chart (14 December 2017)
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Market Commentary 15 December 2017
Markets to make a positive start reacting to exit poll results

Indian equity benchmarks ended the choppy day of trade in green terrain, as traders opted to buy beaten down but fundamentally strong stocks in dying hour of trade ahead of exit poll results of Gujarat election. After a cautious start, markets entered into red terrain and traded cautiously as the Federal Reserve delivered a much-anticipated interest rate hike but flagged caution about inflation, tempering expectations for future tightening, which weighed on the dollar and Treasury yields. Traders also remained 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. Markets extended losses and hit intraday lows to breach their crucial 32,900 (Sensex) and 10,150 (Nifty) levels in noon deals after India's annual rate of inflation based on wholesale prices rose in the month of November, due to increasing prices of food and fuel products. The WPI surged to 3.93% in November 2017 from 3.59% in October 2017 and 1.82% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.74% compared to a build up rate of 3.90% in the corresponding period of the previous year. However, strong recovery in dying hour of trade took markets into green terrain as traders went for bargain hunting ahead of Gujarat exit poll results to be released tomorrow. Traders also took some support with reports that the government will hold consultations with the RBI to work out a mechanism to bring down merchant discount rates (MDR) that have gone up to 0.90% recently from 0.25% of transaction value. Some support also came with a private report stating that India's economic growth has bottomed out and the GDP growth will recover further to 7% over the next few quarters. Finally, the BSE Sensex surged 193.66 points or 0.59% to 33,246.70, while the CNX Nifty was up by 59.15 points or 0.58% to 10,252.10.


The US markets closed lower on Thursday, with the selling pressure coming from health-care, materials sectors and telecoms sectors. Details of the Republican tax deal have started to trickle out, with the big elements including a corporate tax rate of 21% and top individual rate of 27%. The corporate rate is currently 35%. Passage uncertainty persisted, however, with Sen. Marco Rubio reportedly saying he was a ‘No' vote on the current version, without a larger expansion of the child tax credit. On the economy front, so-called flash readings of manufacturing and services activity went in different directions in December. The flash US manufacturing PMI rose to 55 from 53.9 in November, while the flash US services activity index fell to 52.4 from 54.5. Any reading above 50 indicates improving conditions. A flash reading is based on 85%-90% of total PMI survey responses each month. Meanwhile, initial US jobless claims, a tool to measure layoffs, fell by 11,000 to 225,000 in the seven days ended December 9. The Dow Jones Industrial Average dropped 76.77 points or 0.31 percent to 24,508.66, the Nasdaq lost 19.273 points or 0.28 percent to 6,856.53, and the S&P 500 edged lower by 10.84 points or 0.41 percent to 2,652.01.


Crude oil futures made some recovery on Thursday supported by ongoing pipeline shutdown and shrugged off data forecasting a faster than expected rise in US shale oil production next year. The International Energy Agency (IEA) in its monthly oil market report, published on Thursday, revised upward its projection for US oil production. It raised US crude oil growth to 390,000 barrels per day (bpd) this year and 870,000 bpd for 2018. Non-OPEC output, led by the US, will rise by 630,000 bpd in 2017, followed by an increase of 1.6 million bpd during 2018. Benchmark crude oil futures for January delivery ended higher by $0.44 or 0.8 percent at $57.04 a barrel on the New York Mercantile Exchange. Brent crude for February delivery was up by $0.87 to $63.31 a barrel on the ICE.


After a two-day fall, Indian rupee gained ground against dollar and ended higher on Thursday, due to selling of the US currency by exporters and banks. Besides, gains in the domestic equity markets also influenced the rupee sentiment. However, the rupee gains, to some extent, were capped with the Reserve Bank of India (RBI) data showing that India's current account deficit (CAD) widened to 1.2% of GDP or $7.2 billion in July-September, from 0.6% 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.  On the global front, dollar held at more than one-week lows on Thursday after the US central bank kept its economic forecasts unchanged with investors expecting more losses if the European Central Bank outlines a more optimistic outlook on the economy. Finally, the rupee ended at 64.34, 10 paise stronger from its previous close of 64.44 on Wednesday.


The FIIs as per Thursday'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 6309.43 crore against gross selling of Rs 5910.60 crore, while in the debt segment, the gross purchase was of Rs 530.35 crore with gross sales of Rs 975.24 crore.


The US markets made a modestly lower closing in the last session and the Dow pulled back into negative territory after reaching a new record intraday high. There was some concern on uncertainty about the outlook for the Republican tax reform plan after Senator Marco Rubio, R-Fla., indicated his opposition to the legislation currently being negotiated. The Asian markets have made mostly a lower start and some indices are down by about a percent as investors assessed messages from Federal Reserve and European Central Bank meetings and amid lingering concerns about the Republican tax overhaul package. The Indian markets picked up pace in the final hours of last session to post gains of over half a percent. Today, the start is likely to be in green despite negative global cues. Traders will be taking support from the domestic developments, where all the exit polls indicated both Himachal Pradesh and Gujarat going in favour of ruling BJP. Exit polls conducted by various polling agencies have predicted that BJP would retain Gujarat, the major battle ground despite a reduced margin of seats in the 182-member assembly. Traders will also be eyeing the start of the winter session of Parliament. During a total of 14 sittings over a duration of 22 days, both the Houses, Lok Sabha and Rajya Sabha, will take up 25 Bills, including GST compensation to states, for consideration and passing. Meanwhile, Finance Minister Arun Jaitley has emphasised the need to continue the momentum on infrastructure creation and expedite investment in railways to propel the Indian economy. There will be some support to the markets with global rating agency Moody's statement that it has a stable outlook for non-financial corporate in the country, except for telcos, on which it has a negative outlook for 2018. It said that stable outlook is underpinned by the expectation that GDP growth of around 7.6% will result in higher sales volumes.


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Power Grid






  • Maruti Suzuki India is looking at raising prices across its range of models by up to 2 per cent from January 2018 to offset the impact of rising input costs.
  • Tata Steel is planning to raise funds by issuing securities.
  • L&T has successfully commissioned and handed over the state-of-the-art 225 MW Sikalbaha Combined Cycle Power Plant to BPDB for commercial operation.
  • Bharti Airtel has launched Voice over Long Term Evolution facility for its customers in Chennai.
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