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NSE Intra-day chart (20 May 2019)
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Market Commentary 21 May 2019
Markets likely to open marginally in green on Tuesday


Rising for the third session in a row, Indian equity benchmarks settled at record closing highs on Monday, after exit polls predicted win for Bharatiya Janata Party-led National Democratic Alliance (NDA) in the recently concluded general elections. After a fabulous start, key indices remained in the grip of bulls throughout the session, aided by the Reserve Bank of India's (RBI) data report that the country's foreign exchange reserves rose by $1.368 billion to reach $420.055 billion in the week to May 10 on account of a rise in foreign currency assets. In the previous week, the reserves had increased by $171.9 million to $418.687 billion. Traders remained optimistic amid reports that the government is considering various options to adequately empower the Reserve Bank of India (RBI) to deal with banks' stressed assets under the Insolvency and Bankruptcy Code following the Supreme Court order, quashing February 12 circular of the central bank. Markets maintained gaining momentum in the second half of the trading session, despite weak cues from European markets. Market participants got comfort with a private report stating that Indian retail real estate sector attracted private equity investment worth $1.2 billion during 2017-18 calendar years, double from the previous two years. The report attributed the sharp rise in private equity (PE) inflow to further liberalisation in FDI policies such as 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail under the automatic route. The street paid no heed towards India Meteorological Department's (IMD) latest report indicating that pre-monsoon rainfall in the country from March to May recorded a deficiency. The IMD recorded 75.9 millimetres of rainfall from March 1 to May 15 as against the normal rainfall of 96.8 millimetres, which comes to around minus 22%. Finally, the BSE Sensex gained 1421.90 points or 3.75% to 39,352.67, while the CNX Nifty was up by 421.10 points or 3.69% to 11,828.25.


The US markets settled lower on Monday amid ongoing concerns about the escalating US-China trade dispute after Google suspended some of its business with Chinese tech giant Huawei. Google has cut Huawei off from business involving the transfer of hardware, software and technical services, complying with an order by President Donald Trump blocking the sale or transfer of US technology to Huawei. The blow to Huawei added to trade concerns sparked by last Friday's reports that the scheduling of the next round of US-China trade talks is in flux because it is unclear what the two sides would discuss. Besides, private report said that discussions regarding scheduling the next round of talks have not taken place since Trump signed an executive order ramping up scrutiny of Chinese telecom companies. On the economic front, the Federal Reserve Bank of Chicago's national activity index plunged to a negative 0.45 in April, down from an upwardly revised positive 0.05 in March and a negative 0.31 in February. A reading less than zero indicates below-trend economic growth. Atlanta Federal Reserve Bank President Raphael Bostic said that he was not sure whether the central bank would move next to raise or lower interest rates, while saying he expects growth of 2.25% to 2.5% this year, a slowdown from last year's levels. Dow Jones Industrial Average declined 84.10 points or 0.33 percent to 25679.90, Nasdaq dropped 113.91 points or 1.46 percent to 7702.38 and S&P 500 was down by 19.30 points or 0.67 percent to 2840.23.


Crude oil futures ended higher on Monday, but Brent crude prices giving up an earlier rise to finish lower. Traders weighed signs that the Organization of the Petroleum Exporting Countries will decide to extend its production-cut agreement following a committee meeting over the weekend between members and nonmembers of the oil-producer group. Last December, the group agreed to cut output by a collective 1.2 million barrels a day, a move that has driven gains for oil prices this year, though the agreement expires at the end of June. Benchmark crude oil futures for June gained 34 cents or 0.5 percent to settle at $63.10 a barrel on the New York Mercantile Exchange. However, July Brent crude fell 24 cents or 0.3 percent to settle at $71.79 a barrel on London's Intercontinental Exchange.


Indian rupee ended significantly higher against dollar on Monday, after exit poll results suggested another term for the ruling NDA government. Sentiments were buoyed by the Reserve Bank of India's (RBI) data report that the country's foreign exchange reserves rose by $1.368 billion to reach $420.055 billion in the week to May 10 on account of a rise in foreign currency assets. In the previous week, the reserves had increased by $171.9 million to $418.687 billion. Splendid gains of local equities coupled with dollar losing sheen against some other currencies overseas also helped the domestic currency rebound. On the global front, dollar held onto last week's gains on Monday as investors waited for Fed minutes that may give more clues on what prompted U.S. policymakers to strike a broadly neutral stance this month. Finally, the rupee ended at 69.74, 49 paise stronger from its previous close of 70.23 on Friday.


The FIIs as per Monday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4128.13 crore against gross selling of Rs 5255.48 crore, while in the debt segment, the gross purchase was of Rs 432.45 crore with gross sales of Rs 732.11 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.98 crore against gross selling of Rs 10.92 crore.


The US markets ended in red territory on Monday as souring US-China trade relations continued to weigh on sentiment, with selling pressure in technology stocks weighted on markets. Asian markets are trading mostly lower on Tuesday on mounting worries the White House's black-listing of Chinese telecom giant Huawei Technologies could further inflame already tense relations between the Washington and Beijing. Indian markets continued their rally for third straight session on Monday and settled at record highs, with gains of around 4% each, after exit polls predicted the return of the Narendra Modi-led National Democratic Alliance (NDA) to power. Today, the start is likely to be slightly in green, extending precious session's rally. Some support will come with IHS Markit report stating that India's economic policy will continue to focus on maintaining strong economic growth and creating jobs for the country's large and growing population. It added that the government will also focus on the expansion of already announced policies including infrastructure investment, the Goods and Services Tax (GST) rationalisation and financial sector regulations. Meanwhile, the Food Safety and Standards Authority (FSSAI) has permitted small organic producers, having an annual turnover of over Rs 12 lakh, to sell their produce directly to end consumers without certification till April 2020, but will not be able to use Jaivik Bharat logo on their products. The Jaivik Bharat logo is an identity mark to distinguish organic products from non-organic ones. Besides, SEBI came out with a framework for Innovation Sandbox that will help provide financial technology firms and unregulated market participants an environment to test their new solutions with markets data. However, some cautiousness may come with report that rising trade tensions have prompted the World Trade Organization (WTO) to dim its prospect for trade growth in the second quarter of the 2019 calendar year. The WTO said world trade growth is likely to remain weak into the second quarter of 2019. It pointed towards falling levels of growth in international air freight, automobile production, sales and trade in agriculture raw materials. There will be some buzz in the power sector stocks with rating agency ICRA's statement that power regulator, the Central Electricity Regulatory Commission (CERC) allowing a tariff relief to independent power projects (IPP) affected by domestic coal shortfall is positive for the power generation segment. There will be some reaction in infrastructure sector stocks with the Reserve Bank of India's (RBI) data showing that bank credit to infrastructure sector grew by 18.5 per cent to Rs 10.55 lakh crore as of 2018-19, the highest since 2012-13 fiscal. Outstanding bank credit to the sector was Rs 8.91 lakh crore as at March 2018. There will be lots of earnings reaction based on the performance of the companies.


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



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Nifty Top volumes




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Tata Motors





Indiabulls Housing Finance






  • TCS is expecting significant growth in the coming years across markets like Latin America, India and South Africa that have historically lagged in technology spending. 
  • Coal despatches by Coal India to the power sector have been rose marginally by 1% to 40.7 MT in April 2019 compared to 40.3 MT in the year-ago month. 
  • Dr Reddy's Laboratories is planning to spend upto $300 million on research and development during financial year 2019-2020. 
  • L&T has acquired 73,953 shares of Mindtree from the open market on May 20, 2019.
News Analysis