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NSE Intra-day chart (19 April 2018)
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Market Commentary 20 April 2018
Markets likely to make negative start on weak global leads


Indian equity benchmarks resumed northward journey after a day's break and ended in green terrain with frontline gauges recapturing their crucial 34,400 (Sensex) and 10,550 (Nifty) levels. Markets traded in green terrain throughout the session as traders took some encouragement with International Monetary Fund's (IMF) statement that the debt level is relatively high in India, but the authorities are planning to bring it down over the medium term with the right policies. In fiscal year 2017-18, India is planning to continue with the consolidation in the current fiscal year and over the medium term. Also, IMF in its Fiscal Monitor report titled Capitalising on Good times, said that India should now fully implement the new nationwide indirect tax to avoid tax revenue underperformance resulting in cuts to capital expenditures. Traders also took some support from a private poll which showed that India will claim the top spot among the world's fastest-growing major economies this year, but rising trade tensions between the United States and China may restrain that growth. The recent tit-for-tat import tariffs imposed by the US and China have raised concerns about a full-fledged global trade war which could throw an otherwise-strong world economy off-course. The latest poll, taken April 11-18, predicted India's economy will expand 7.4 percent in the fiscal year that began this month. Markets also got some support with a private report stating that the Reserve Bank of India is expected to go for a 25 basis points rate cut in key rates, due to normal monsoon forecast from Indian Meteorological Department. Traders shrugged off former finance minister P Chidambaram's statement that the ghost of demonetisation has come back to haunt the government and alleged that the Rs 2,000 notes were printed only to help hoarders. In the wake of cash crunch in some parts of the country, he also said there was a possibility that people have lost confidence in the banking system due to the bank scams and they were not putting their surplus money into the banks. Finally, the BSE Sensex surged 95.61 points or 0.28% to 34,427.29, while the CNX Nifty was up by 39.10 points or 0.37% to 10,565.30.


The US markets closed lower on Thursday, with consumer staples, real estate and technology shares leading the losses. Investors continued to digest a mixed bag of corporate earnings. While results have largely come in ahead of expectations thus far, there have been some disappointments, and others haven't produced the kind of blowout results seen necessary to continue pushing shares higher from elevated levels. Federal Reserve Board Governor Lael Brainard said that there are some signs of financial imbalances in the economy. Brainard said two areas of elevated risk are asset valuations and business leverage. Brainard said that it was premature for the Fed to revisit the calibration of core capital and liquidity requirements for the large banks.  On the economy front, the rate of layoffs in the US fell slightly in April and clung near a 45-year low, reflecting a booming jobs market in which work is easy to find and companies are scrambling to find help. Initial jobless claims dipped 1,000 to 232,000 in the week ended April 21. The more stable monthly average of claims rose a scant 1,250 to 231,250. The number of people already collecting unemployment benefits, known as continuing claims, fell by 15,000 to 1.86 million. Meanwhile, the Philadelphia Fed's manufacturing index edged up 1 point to 23.2 in April. The index for future activity dropped to 40.7 in April from 47.9 in March. The index for new orders slipped to 18.4 in April from 35.7 in the prior month. Shipments also dropped to 23.9 from 32.4 in the prior month. The Dow Jones Industrial Average lost 83.18 points or 0.34 percent to 24,664.89, the Nasdaq dropped 57.18 points or 0.78 percent to 7,238.06, and the S&P 500 was down by 15.51 points or 0.57 percent to 2,693.13. 


Crude oil futures pulled back Thursday after hitting multi-year highs, even as Organization of the Petroleum Exporting Countries (OPEC) bragged that the global oil glut is all but gone. OPEC officials claim their supply quota plan with Russia has had the intended effect of re-balancing the global oil market. Still, the cartel and Kremlin want to drive prices even higher and offset the U.S. shale oil boom, so they are likely to extend the supply quota plan beyond this year. OPEC is meeting in the Middle East this week to discuss the issue. Benchmark crude oil futures for May delivery fell 18 cents or 0.3 percent to settle at $68.29 a barrel on the New York Mercantile Exchange. However, June Brent crude gained 30 cents or 0.4 percent to settle at $73.78 a barrel on London's Intercontinental Exchange.


Continuing its downward trend for the fourth day in a row, Indian rupee ended weaker against dollar on Thursday, on continued demand for the American unit. Traders failed to get support with report that the Reserve Bank of India is expected to go for a 25 basis points rate cut in key rates, due to normal monsoon forecast from Indian Meteorological Department. Besides, investors have maintained cautious approach ahead of the release of Reserve Bank of India's minutes of its latest policy meeting. However, positive trend in equity market capped the rupee's losses. On the global front, pound dropped against dollar on Thursday after a bigger than expected dip in UK retail sales. Finally, the rupee ended at 65.80, 14 paise weaker from its previous close of 65.66 on Wednesday.


The FIIs as per Thursday's data were net sellers in equity and debt segments both. In the equity segment, the gross buying was of Rs 4095.98 crore against gross selling of Rs 4973.74 crore, while in the debt segment, the gross purchase was of Rs 1079.48 crore with gross sales of Rs 3544.34 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.15 crore against gross selling of Rs 1.79 crore.


The US markets ended lower on Thursday despite the Labor Department releasing a report showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended April 14th. Asian markets were trading mostly in red after two days of broad gains, with technology stocks leading the way following a downbeat outlook from Taiwan Semiconductor Manufacturing Company. Indian equity markets ended modestly higher on Thursday as a surge in commodity prices helped in lifting mining stocks and investors remained optimistic about the ongoing earnings season. Today, the markets are likely to make negative start start amid weak global cues. Traders will also remain concern with IMF chief Christine Lagarde's statement that she does not expect the pace of economic reforms in India to continue in an election year. Traders will get some support later in the day with Chief Economic Adviser Arvind Subramanian's statement that the India-US ties have been extremely well on the strategic and defence fronts but the relationship cannot realise its full potential without stronger economic bond. Some support will also come with report that PE investments witnessed a robust 46 per cent jump in deal values at $1.3 billion in March, taking the total tally for the first quarter of 2018 to $4 billion, up 76 per cent over the same period a year ago. Traders will also get some solace with report that India will claim the top spot among the world's fastest-growing major economies this year, but rising trade tensions between the United States and China may restrain that growth. Meanwhile, India and Mauritius today concluded the second round of negotiations for the proposed free trade agreement (FTA), aimed at boosting bilateral trade and investments. There will be some important earnings announcements too, to keep the markets buzzing.


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  • Sun Pharmaceutical Industries' one of the wholly owned subsidiaries has increased its shareholding in Ranbaxy Malaysia. 
  • Reliance Industries and BP have sanctioned the Satellite cluster project in Block KG D6. 
  • Bajaj Auto has launched its new Pulsar 150 with twin disc brakes priced at Rs 78,016. 
  • IndusInd Bank has reported a rise of 26.81% in its net profit at Rs 953.09 crore for Q4FY18 as compared to Rs 751.61 crore for Q4FY17.
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