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NSE Intra-day chart (18 August 2017)
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Market Commentary 21 August 2017
Markets to make a cautious start; Infosys movement eyed

Friday turned out to be a disappointing day of trade for Indian equity benchmarks, as key indices traded sluggish through the session and settled below their crucial 31,600 (Sensex) and 9,850 (nifty) levels. Traders opted to book profits in risky assets after three days of continuous rally amid weak global cues. Heavy selling in IT pack mainly dampened sentiments with Infosys leading the fall on the back of developments in the top management exit. IT major announced that its board of directors has accepted the resignation of Vishal Sikka as the Managing Director and CEO with immediate effect. Some pessimism also crept in with Chief Economic Adviser Arvind Subramanian's statement that  overemphasis on renewable energy would create a 'double whammy' for the government by reducing the viability of thermal power plants and raising bad loans of state-owned banks. Traders shrugged off report by real estate consulting firm CBRE South Asia that India has surpassed China in the global Retail Development Index in 2017, indicating growing prominence of the country as a preferred retail destination for global brands. Traders failed to get any sense of relief with report that the government gave some relief to taxpayers availing of transitional input tax credit under the Goods and Services Tax (GST) regime by giving them an extra week till 28 August 28 to file tax returns. Finally, the BSE Sensex lost 270.78 points or 0.85% to 31,524.68, while the CNX Nifty was down by 66.75 points or 0.67% to 9,837.40.


The US markets closed lower on Friday, to register another unsightly week of losses as low volumes and skittish investors left Wall Street especially vulnerable to pullbacks. Stocks shifted between gains and losses as President Donald Trump's strategist Stephen Bannon departed the White House, following the prior day's selloff fueled by a terrorist attack in Barcelona and rumors that Trump's economic adviser Gary Cohn might resign. On the economy front, Americans were almost as optimistic about the economy in August as they were at the start of the year, when President Donald Trump took office, according to a closely watched consumer-sentiment survey. The University of Michigan's sentiment index climbed to 97.6 in August from 93.4 in July, sitting just below a 98.5 reading in January that marked a 13-year high. The Michigan survey, for instance, found a notable increase in the number of people who said their own financial well-being had improved. An index that measures current conditions slipped to 111 from 113.4. A gauge that looks out six months rose to 89 from 80.5, however, also marking the highest level since January. The Dow Jones Industrial Average dropped 76.22 points or 0.35 percent to 21,674.51, the Nasdaq lost 5.38 points or 0.09 percent to 6,216.53, while the S&P 500 edged lower by 4.46 points or 0.18 percent to 2,425.55.  


Crude oil futures extended their gains on Friday with a rally after industry data showed the U.S. rig count fell the week, while on the demand side of the equation, the University of Michigan released a report on Friday showing a much bigger than expected improvement in US consumer sentiment in the month of August. The report said the preliminary reading on the consumer sentiment index for August jumped to 97.6 from the final July reading of 93.4. Meanwhile, oilfield services firm Baker Hughes on Friday, showing its weekly count of oil rigs operating in the United States last week fell by five rigs to a total of 763. The dip in U.S. oil rigs eased investor concerns that rising U.S. production could hamper Opec's ability to stem the glut in supplies. Benchmark crude oil futures for September delivery ended up by $1.42 or 3 percent to $48.51 on the New York Mercantile Exchange. In London, Brent crude for September delivery ended higher by 3.59 percent at $52.87 a barrel on the ICE.


Indian rupee ended marginally higher against dollar on Friday due to sustained selling of the US currency by exporters and banks. Sentiments got support with report that the government gave some relief to taxpayers availing of transitional input tax credit under the Goods and Services Tax (GST) regime by giving them an extra week till 28 August 28 to file tax returns. The domestic unit also found some support from dollar weakness overseas. However, the rupee's gains were restricted as the domestic equities remained weak. On the global front, yen was the major mover among the G10 group of developed world currencies on Friday, gaining another half per cent against the dollar as nerves over stock market valuations and the future of an 8-year global rally seeped into other assets. Finally, the rupee ended at 64.14, 1 paise stronger from its previous close of 64.15 on Wednesday.


The FIIs as per Friday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 8959.08 crore against gross selling of Rs 10886.50 crore, while, in the debt segment, the gross purchase was of Rs 363.69 crore with gross sales of Rs 533.13 crore.


The US markets once again ended in red in the last session following the sell-off seen in the previous session. The trade remained lacklusture and the major averages spent much of the session bouncing back and forth across the unchanged line. The Asian markets have made mostly a soft start, eyeing the key meeting of global central bankers at Jackson Hole, Wyoming. The Indian markets suffered severe sell-off in the last session and the major benchmarks lost around a percent in aftermath of Infosys CEO Vishal Sikka's resignation. Today, the start is likely to be cautious and some recovery in the pounded Infosys shares can be seen, which can support the overall markets, as the Infosys' board approved a Rs 13,000-crore share buyback at Rs 1,150 per share, almost 25 percent higher than the Friday's close. Traders will be eyeing the PM Narendra Modi's meet with industry leaders for policy inputs to build a 'New India'. The banking stocks will remain in focus, as the Centre is looking to set up a new mechanism to speed up decisions on possible mergers among PSBs. The new process will be along the lines of the alternative mechanism that's been adopted for strategic disinvestments, which involves a small group of cabinet ministers. Meanwhile, RBI Governor Urjit Patel has said that the central bank is working closely with the government to resolve non performing asset (NPA) problem and considering package of measures. The infra stocks will be buzzing with a flash report by the Ministry of Statistics and Programme Implementation (MoSPI) stating that as  many as 322 infrastructure projects, each worth Rs150 crore or above, have seen a total cost overrun of Rs1.71 lakh crore by March 2017.


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  • Infosys in association with ATP, the governing body of men's professional tennis, has launched a new 'PlayerZone' app and website.
  • Axis Bank has launched a new home loan product that entails waiving off a few EMIs during the course of a loan.
  • Power Grid Corporation of India has entered into loan agreement with Asian Development Bank on August 17, 2017 for an amount of $500 million.
  • NTPC has inked pact with online cab service provider OLA Cabs for providing round-the-clock taxi services under the Ola Corporate plan to its employees.
News Analysis