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NSE Intra-day chart (16 May 2019)
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Market Commentary 17 May 2019
Markets likely to make a cautious start on Friday


Equity benchmarks bounced back on Thursday, with Sensex and Nifty reclaiming their crucial psychological levels of 37,300 and 11,250, respectively. After a cautious start, key indices remained choppy for the most part of the day, as India's merchandise exports fell to a four-month low of 0.64% in April, 2019 as compared to same period of last year, as shipments of engineering goods, gems and jewellery, leather and other products declined, widening the trade deficit to a five-month high. The trade deficit, a gap between exports and imports, expanded to $15.33 billion in April 2019 as compared to $13.72 billion in April 2018. Adding some anxiety among traders, NSE imposed fines on 250 companies and the penalty was in the range of Rs 1,000 to Rs 4.5 lakh for non-compliance with various listing regulations for the quarter ended March 31, 2019. However, last leg buying helped the markets to settle the session near day's high points. Market participants got comfort, as the Reserve Bank of India released a vision document for ensuring a safe, secure, convenient, quick and affordable e-payment system as it expects the number of digital transactions to increase more than four times to 8,707 crore in December 2021. Investors were seen taking a note of the PHD Chamber of Commerce and Industry's (PHDCCI) statement that a decisive government at the Centre would be crucial to push India's growth trajectory to the next level and further improve the ease of doing business scenario. Some support also came with reports that trade body Confederation of Indian Industry (CII) would focus on enhancing industry's competency and employment generation under its seven point charter for the southern region this year. Finally, the BSE Sensex gained 278.60 points or 0.75% to 37,393.48, while the CNX Nifty was up by 100.10 points or 0.90% to 11,257.10.


The US markets settled higher on Thursday amid investors weighed the latest developments on the trade front after President Donald Trump appeared to target Chinese telecommunications group Huawei Technologies Company with an emergency declaration against threats to US technology. Further, the strength on markets also reflected a positive reaction to earnings reports from Walmart (WMT), with the retail giant climbing by 1.4%. The advance by Walmart comes after the company reported fiscal first quarter earnings that exceeded street estimates on better than expected comparable store sales growth. Besides, the markets also benefited from the release of a batch of upbeat economic data, including report from the Labor Department showing initial jobless claims dropped more than expected in the week ended May 11. The report said initial jobless claims slid to 212,000, a decrease of 16,000 from the previous week's unrevised level of 228,000. Street had expected jobless claims to dip to 220,000. A separate report from the Commerce Department showed a substantial increase in new residential construction in the month of April. The Commerce Department said housing starts surged up by 5.7% to an annual rate of 1.235 million in April after climbing by 1.7% to a revised rate of 1.168 million in March. Meanwhile, the Philadelphia Federal Reserve also released a report a significant acceleration in the pace of growth in regional manufacturing activity in May. The Philly Fed said its diffusion index for current general activity surged up to 16.6 in May after falling to 8.5 in April, with a positive reading indicating growth in regional manufacturing activity. Dow Jones Industrial Average surged 214.66 points or 0.84 percent to 25862.68, Nasdaq rose 75.90 points or 0.97 percent to 7898.05 and S&P 500 was up by 25.36 points or 0.89 percent to 2876.32.


Magnifying their previous session's gains, crude oil futures ended higher on Thursday as investors focused on still percolating Middle East tensions. The Saudi-led coalition in Yemen said it launched a series of airstrikes on Iran-backed Houthi rebels. The move was in retaliation for the Houthi attacks earlier this week on the Saudi's oil infrastructure. Besides, the Energy Information Administration (EIA) said domestic supplies of natural gas rose by 106 billion cubic feet for the week ended May 10. A survey of analysts by S&P Global Platts had shown expectations for an increase of 101 billion cubic feet, while the five-year average stands at a climb of 88 billion. Benchmark crude oil futures for June surged 85 cents or 1.4 percent to settle at $62.87 a barrel on the New York Mercantile Exchange. July Brent crude gained 85 cents or 1.2 percent to settle at $72.62 a barrel on London's Intercontinental Exchange.


Rising for the third straight day, Indian rupee ended considerably stronger against dollar on Thursday, amid fresh selling of the American currency by exporters and banks. Sentiments remained up-beat with a report that the India's services exports rose by 6.6 per cent to $17.94 billion in March. Services imports in March too grew by 10.55 per cent to $11.37 billion. The trade balance in services for the month under review is estimated at $6.58 billion. A spectacular relief rally in local equities also supported the forex sentiment. Traders overlooked report that monsoon rains are expected to hit Kerala on June 6, five days after its normal onset date. The India Meteorological Department (IMD) also said the southwest monsoon arrival over the State is likely to be slightly delayed. On the global front, euro edged higher against the dollar and sterling on Thursday as the threat of U.S. tariffs on autos was pushed back, though the rise was capped by unease about this weekend's European parliamentary elections. Finally, the rupee ended at 70.03, 30 paise stronger from its previous close of 70.34 on Wednesday.


The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 4208.89 crore against gross selling of Rs 5256.49 crore, while in the debt segment, the gross purchase was of Rs 3897.41 crore with gross sales of Rs 1339.33 crore. Besides, in the hybrid segment, the gross buying was of Rs 92.69 crore against gross selling of Rs 22.15 crore.


The US markets ended higher for third straight session on Thursday following solid economic data and good earnings from Dow members Cisco and Walmart. Asian markets are trading mixed on Friday as upbeat US economic data and solid corporate results aided sentiments, though, US-China trade tensions kept the markets in check. Indian markets ended Thursday's choppy trading session higher with gains of over 0.70 per cent each, mainly due to late hour buying by investors. Today, the start of last trading day of week is likely to be cautious tracking mixed cues from Asian peers and ahead of key exit poll for the current Lok Sabha elections due on May 19 evening after the last phase of voting. Investors may also remain on the sidelines ahead of outcome of 17th Lok Sabha election on May 23. However, some support may come later in the day with a report that the ongoing trade war between the US and China will help India tap export opportunities in both the countries in areas such as garments, agriculture, automobile and machinery. Traders may take note of report that Finance Commission held discussions with the finance ministry on fiscal and economic management as well as rationalisation of expenditure related to centrally sponsored schemes. The 15th Finance Commission observed that the GDP numbers suggest continued high growth over the medium term even though there have been fluctuations within the overall global trend. Meanwhile, the Reserve Bank of India (RBI) made it mandatory for NBFCs with assets size of more than Rs 50 billion to appoint a chief risk officer (CRO) to ensure highest standards of risk management. The RBI said that the CRO shall be a senior official in the hierarchy of an NBFC and shall possess adequate professional qualification or experience in the area of risk management. The CRO should be appointed for a fixed tenure with the board's approval. There will be some reaction in banking sector stocks with a private report that public sector banks are demanding a capital infusion of Rs 50,000 crore in the ongoing financial year 2019-20. The Finance Ministry had infused Rs 1.06 lakh crore as bank recap during the previous financial year as against the budgeted target of Rs 65,000 crore. There will be some buzz in the auto sector stocks with Additional Chief Secretary and Commissioner of Commercial Taxes, Dr. T.V. Somanathan's statement that the improvement in economic efficiency from the introduction of Goods and Services Tax (GST) is one of the reasons for slowdown in commercial vehicle sales. There will be lots of earnings reaction to keep the markets buzzing.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Nifty Top volumes




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  • Bajaj Finance has allotted 750 Secured redeemable NCDs of face value of Rs 10 lakh each aggregating to Rs 75 crore. 
  • Tata Steel is going to continue exploring various business options including merger in Europe, with an aim to make European business stronger. 
  • HDFC has entered into a partnership with India Mortgage Guarantee Corporation for a mortgage guarantee-backed home loan. 
  • Tata Motors has launched its official app Tata Motors Service Connect for the customers of passenger vehicles business which allows them to connect with company for his/her after market needs.
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