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NSE Intra-day chart (19 June 2019)
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Market Commentary 20 June 2019
Markets to get a positive start on firm global cues


Indian equity benchmarks staged recovery to end on a flat note on Wednesday, with Sensex and Nifty reclaiming their crucial psychological levels of 39,100 and 11,650, respectively. After a fabulous start, key indices remained positive for the most part of the session, aided by the Reserve Bank of India's (RBI) statement that it will infuse Rs 12,500 crore of liquidity into the system through purchase of government bonds. Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of five government securities. Traders took a note of a private report that seven million jobs were formalised between 2015 and 2018 because of various measures, including GST, demonetisation, Skill India policies, fixed-term contract, maternity leave enhancement, among others. The report estimated job formalisation to the tune of 11 million between 2018 and 2021. In the last leg of the trade, markets turned volatile on account of weak cues from European markets. Domestic sentiments got cautious amid a private report stating that corporate investment remains a concern in India. But, key indices managed to erase losses, with a private report stating that the Centre is considering the establishment of a special purpose vehicle (SPV) to monitor, screen, and rate commercial borrowers. One of the initiatives the new government will work on in its first 100 days, the SPV, similar to the Goods and Services Tax Network (GSTN) will form a database compiling information from public sector banks (PSBs). Some support also came with a report that the Competition Commission of India (CCI) is conducting a Market Study on E-commerce in the country, in a view of the rapid growth of electronic commerce (e-commerce) and the rising importance of online trade in a large number of goods and services in India. Finally, the BSE Sensex rose 66.40 points or 0.17% to 39,112.74, while the CNX Nifty was down by 0.05 points to 11,691.45.


The US markets ended marginally higher on Wednesday after the Fed suggested the next move for rates is likely to be lower, although buying interest was somewhat subdued amid signs the rate cut could be delayed until next year. The Fed announced its widely expected decision to leave interest rates unchanged with the focus largely on the wording of the accompanying statement. The statement said the Fed continues to see a sustained economic expansion, a strong labor market, and inflation near its 2 percent target as the most likely outcomes but noted uncertainties about this outlook have increased. The Fed said in light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion. The line in the statement mirrors the pledge Powell made in a speech earlier this month, which helped spark expectations of a near-term interest rate cut. Notably, the Fed also omitted its reference to remaining patient when determining future changes to interest rates. The central bank also revealed that its decision to leave rates unchanged was not unanimous, with St. Louis Fed President James Bullard preferring to lower rates by 25 basis points. Powell stated many participants believe that some cut to the fed funds rate would be appropriate in the scenario they see as most likely. Looking ahead, the Fed downwardly revised its forecasts for consumer price inflation in 2019 but left its GDP growth expectations unchanged at 2.1 percent. The forecast for interest rates at the end of 2019 was also unchanged from the March meeting, while the projections now point to at rate cut in 2020. Dow Jones Industrial Average rose 38.46 points or 0.15 percent to 26504.00, Nasdaq gained 33.44 points or 0.42 percent to 7987.32 and S&P 500 was up by 8.71 points or 0.30 percent to 2926.46.


Crude oil futures ended marginally lower on Wednesday giving up the gains they saw in the immediate wake of US government figures that revealed a larger-than-expected drawdown in crude stockpiles. The Energy Information Administration (EIA) reported that US crude supplies fell by 3.1 million barrels for the week ended June 14. Analysts polled by S&P Global Platts expected a decline of 2 million barrels in crude inventories, on average. The American Petroleum Institute on Tuesday reported an 812,000-barrel fall. The EIA data also showed that gasoline inventories were down 1.7 million barrels, while distillate stockpiles edged lower by 600,000 barrels last week. Benchmark crude oil futures for July declined 14 cents or 0.3 percent to settle at $53.76 a barrel on the New York Mercantile Exchange. August Brent fell 32 cents or 0.5 percent to settle at $61.82 a barrel on London's Intercontinental Exchange.


Indian rupee, after making a good start, gave away most of its gains to end marginally higher against dollar on Wednesday, driven by weakening of the greenback in overseas markets. Investors took note of private report that seven million jobs were formalised between 2015 and 2018 because of various measures, including GST, demonetisation, Skill India policies, fixed-term contract, maternity leave enhancement, among others. The report estimated job formalisation to the tune of 11 million between 2018 and 2021. On the global front, dollar weakened against main rivals on Wednesday as investors waited to see whether the U.S. Federal Reserve would sound as dovish on future interest rate cuts and stimulus as the European Central Bank. Finally, the rupee ended at 69.68, 2 paise stronger from its previous close of 69.70 on Tuesday.


The FIIs as per Wednesday'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 4627.33 crore against gross selling of Rs 4561.21 crore, while in the debt segment, the gross purchase was of Rs 1275.48 crore with gross sales of Rs 1456.77 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.38 crore against gross selling of Rs 2.21 crore.


The US markets ended higher on Wednesday after the Federal Reserve indicated that it may cut rates multiple times this year. Asian markets are trading mostly in green on Thursday after the US Federal Reserve left interest rates unchanged overnight but opened the door to a potential rate cut on the horizon. Indian markets ended slightly higher on Wednesday as the last hour buying offset the sudden fall in benchmark indices. Today, the markets are likely to make optimistic start mirroring firm global cues following dovish monetary policy outlook from the US Federal Reserve. Some support will also come with report that the government has decided to waive registration charges for electric vehicles. The move, aimed at promoting electric vehicles (EVs) in India, comes at a time when the country plans high penetration of such vehicles by 2030. Besides, The Economic Advisory Council to the Prime Minister (EAC-PM) has rejected the claims of former CEA Arvind Subramanian regarding over-estimation of GDP growth after 2011, saying his analysis ignores data on services and agriculture and shows blind trust in a private firm CMIE. However, there may be some cautiousness with report that India's monsoon has progressed more slowly than usual after hitting Kerala nearly a week late. Monsoon rains have been 44% lower-than-average so far in June, delaying the sowing of summer-sown crops and raising concerns that parts of the country could face a worsening drought. Traders may took note of Commerce and Industry Minister Piyush Goyal's statement that the government will not allow foreign companies to operate in multi-brand segment and necessary action will be taken against people indulging in predatory pricing. Meanwhile, markets regulator SEBI has set various grounds on the basis of which an applicant can be assured confidentiality while filing a plea under the settlement mechanism. For the confidentiality, the regulator will assess whether the co-operation was provided before the applicant had knowledge of any pending proceedings. There will be some buzz in the aviation stocks with report that Crisil Research expects the domestic passenger traffic growth for the industry to be low single digit, a tad above 2% in fiscal 2020. There will be some reaction in NBFCs stocks with a private report indicating that facing a record amount of debt that's about to mature, India's non-bank financing companies are finding their troubles worsening as a crisis of credibility starts to bite.


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



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NSE Nifty




BSE Sensex





Nifty Top volumes




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Yes Bank





Indiabulls Housing Finance





Tata Motors





Tata Steel





Power Grid






  • L&T's construction arm -- L&T Construction has secured orders from prestigious clients in Sri Lanka and from within India.  
  • Bharti Airtel has launched 4G services in the Lakshadweep Islands. 
  • M&M is aiming 10 to 12 percent growth in its Bolero range pickups in FY20.
  • HDFC Bank will open 25 more branches in the state of Gujarat, taking its branch network to over 440.
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