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NSE Intra-day chart (17 May 2017)
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Market Commentary 18 May 2017
Markets to make a gap-down start on weak global cues

Domestic frontline indices went through a choppy session of trade to finally negotiate a close in the green territory, as a strong rupee and healthy buying in metal and automobile stocks buoyed investors' sentiments. Further, the continued buying from FII and announcement of good quarterly results by some blue-chip companies kept a positive vibe in the market. Adding the optimism of investors, senior UN economic official has said demonetisation policy is not expected to have a long-term impact on domestic demand in India, which is projected to clock a 7.9% growth in fiscal 2018. Also, the Union Finance Minister Arun Jaitley said that government's move to demonetise Rs 500 and Rs 1,000 notes has helped the authorities bring 9.1 million people under the tax net as money has lost its anonymity. Markets exhibited sideways pattern as traders were adopting a cautious approach ahead of a crucial GST (Goods and Services Tax) panel meet in Srinagar starting tomorrow. Besides, negative trend was seen in global markets, amid ongoing political uncertainty in the US, capping the gains. However, investors' sentiments got some support with Indian Meteorological department's (IMD) statement that the southwest monsoon will hit Kerala on May 30, two days ahead of schedule. The onset of southwest monsoon over Kerala signals the arrival of monsoon over the Indian subcontinent.  Meanwhile, power stocks gained after the CCEA approved a new coal linkage policy to ensure adequate supply of the fuel to power plants through reverse auction. Buying intensified in metal stocks after India Ratings and Research said that the National Steel Policy 2017 announced by the Ministry of Steel will give a boost to the struggling Indian steel industry and it is betting on higher spending on infrastructure and construction sector through government initiatives to push steel demand and increase utilization. The policy focuses on improvement in the efficiency parameters so as to reduce the cost of production and develop advanced steel products to reduce the dependence on imports. Finally, the BSE Sensex gained 76.17 points or 0.25% to 30658.77, while the CNX Nifty was up by 13.50 points or 0.14% to 9,525.75.  


The US markets closed lower on Wednesday, as concerns about President Donald Trump's FBI controversy weighed on investor sentiment. Uneasiness for global equities came after the New York Times reported that Trump in February asked then-director of the Federal Bureau of Investigation, James Comey, to stop his investigation into former National Security Adviser Michael Flynn. The report also prompted some House Republicans to call for a further investigation and for the FBI to hand over documents related to communications between the president and Comey, whom Trump fired earlier this month. Meanwhile, after months of speculation, it happened -- Household debt levels in the US have surpassed their 2008 peak. The New York Federal Reserve released a new report that showed US collective household debt balances totaled $12.73 trillion in March 2017, surpassing the 2008 peak of $12.68 trillion. This isn't the first debt milestone Americans have hit recently. The Federal Reserve announced in April that the US had $1 trillion in credit-card debt. The Dow Jones Industrial Average lost 372.82 points or 1.78 percent to 20,606.93, Nasdaq dropped 158.63 points or 2.57 percent to 6,011.24, while S&P 500 edged lower by 43.64 points or 1.82 percent to 2,357.03.


Crude oil futures surged on Wednesday to hit three weeks high after the U.S. Energy Information Administration data confirmed a surprising drop in U.S. oil stockpiles. As per EIA domestic crude supplies fell by 1.8 million barrels for the week ended May 12. That's the sixth straight weekly decline. Meanwhile, gasoline inventories dropped by only 0.413 million, while distillate stockpiles fell by 1.94 million barrels. A report from the International Energy Agency (IEA), however, warned that OPEC's effort to rein in the glut in supply may fail even if the oil group agrees to extend its supply-cut agreement. Benchmark crude oil futures for June delivery ended higher by $0.64 or 1.4 percent to $49.30 on the New York Mercantile Exchange. In London, Brent crude for July delivery ended up by $ 0.48 to end at $52.13 on the ICE.


Indian rupee extended its weakness for the second straight day against dollar on Wednesday due to mild dollar demand from banks and importers. Sentiments remained dampened as the United Nations (UN) lowered India's gross domestic product (GDP) growth forecast for the financial year 2017. As per the UN World Economic Situation and Prospects as of mid- 2017 report, the Indian economy is expected to grow at 7.3 percent in 2017, a downward revision from the 7.7 percent forecast in January. However, dollar weakness against basket of major currencies overseas capped some losses of the domestic currency. On the global front, dollar dropped sharply against major currencies including the pound and the euro, after Trump reportedly asked former FBI director James Comey to drop an investigation into Michael Flynn and his connections to Russia. Finally, the rupee ended at 64.15, 7 paise weaker from its previous close of 64.08 on Tuesday.


The FIIs as per Wednesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5768.74 crore against gross selling of Rs 4724.55 crore, while in the debt segment, the gross purchase was of Rs 1236.89 crore with gross sales of Rs 243.14 crore.


The US markets slumped in the last session and the tech-heavy Nasdaq which has been on a record breaking spree pulled back well off its record closing high, amid ongoing political turmoil in Washington further offsetting optimism about President Donald Trump's ability to implement tax reform and deregulation. The Asian markets have made a weak start tailing the US sell-off. The Japanese market was down by over a percent as the yen strengthened against the dollar. The Indian markets coming off the initial choppiness managed to extend the gains and the benchmarks reached new record highs in the last session. Today, the start is likely to be somber on weak global cues and all eyes will be on the two-day GST Council meet beginning in Srinagar, which will see participation from 29 states and union territories, along with Jaitley, and senior officials from the revenue department. In the meeting Finance Ministry Arun Jaitley is likely to finalise the rates that various goods and services will attract from July 1. Meanwhile, the Union Cabinet has approved a transparent mechanism for coal allocation and signalled a renewed focus on nuclear power generation. There will be some support to the markets with Commerce and Industry Minister Nirmala Sitharaman's statement that India's exports have been increasing despite global headwinds and efforts are being made to neutralise any impact on them due to implementation of GST. There will be some buzz in media and construction companies on report that the government is moving ahead with further opening of print media, construction and retail sectors to foreign investments and the commerce and industry ministry may soon approach the Union Cabinet to get the final approval on the proposals. There will be lots of important earnings announcements to keep the markets in action.


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  • Wipro has developed nine block chain-based solutions for the Banking Financial Services and Insurance, Manufacturing, Retail and Consumer Goods industries.
  • Tata Steel has agreed for an 'in-principle' settlement to the key commercial terms of a deal to cut benefits and improve the funding position of its British pension scheme.
  • Dr Reddy's Lab has received approval from the USFDA to launch Doxorubicin Hydrochloride Liposome Injection in the United States market.
  • HDFC has decided to raise Rs 500 crore by issuing secured redeemable non-convertible debentures of three-year tenor on private placement basis at a coupon of 7.67 percent.
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