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NSE Intra-day chart (21 February 2019)
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Market Commentary 22 February 2019
Markets to make a pessimistic start on weak global cues


Indian benchmarks gained for the second consecutive session on Thursday, with Sensex and Nifty closing above their crucial psychological levels of 35,800 and 10,750, respectively. The markets made a cautious start, affected with the National Association of Software and Services Companies' (NASSCOM) latest survey report stating that global economic uncertainties are leading to a cautionary outlook among CEOs, but they expect digitization initiatives to continue with the same momentum. According to the report, digitization of businesses and enhanced customer experience have emerged as the top 2 spending areas in IT and BPM for 2019. Some concerns also came with reports that the Goods and Services Tax (GST) Council has deferred a decision on tax rates on real estate and lottery till February 24, and extended the deadline for businesses to file sales returns for January till February 22 for all states; and February 28 for Jammu & Kashmir. However, in late morning deals, key indices gained momentum to end the trading session in green territory, aided by Prime Minister Narendra Modi's statement that the Indian economy is based on sound fundamentals and will in the near future double in size to $5 trillion. Traders also took encouragement with a private report stating that India will remain the fastest growing major economy, much ahead of China, in the next decade 2019-28. Some support also come with the Finance Ministry expecting bad loan recoveries to touch Rs 1.80 lakh crore during the current fiscal with two major cases at the final stage of resolution. Adding comfort among the market participants, the Retirement fund body, Employment Provident Fund Organisation (EPFO) in its latest Net Payroll Data report showed that employment generation in the India's formal sector almost trebled to touch a 16-month high of 7.16 lakh in December 2018 as compared to 2.37 lakh in the same month a year ago. Finally, the BSE Sensex gained 142.09 points or 0.40% to 35,898.35, while the CNX Nifty was up by 54.40 points or 0.51% to 10,789.85.


The US markets ended lower with losses of over quarter a percent on Thursday, with Nasdaq snapping an eight-session winning streak, on the heels of a slew of disappointing economic data, including a report from the Philadelphia Federal Reserve unexpectedly showing a contraction in regional manufacturing activity for the first time since May of 2016. The Philly Fed said its index for current manufacturing activity in the region tumbled to a negative 4.1 in February from a positive 17.0 in January, with a negative reading indicating contraction. The index had been expected to slip to 14.0. A separate report from the Commerce Department also showed a smaller than expected increase in durable goods orders in January. The report said durable goods orders surged up by 1.2 percent in December after jumping by an upwardly revised 1.0 percent in November. The National Association of Realtors (NAR) released a report showing existing home sales unexpectedly fell to their lowest level in over three years in January. NAR said existing home sales tumbled by 1.2 percent to an annual rate of 4.94 million in January after plunging by 4.0 percent to a revised rate of 5.00 million in December. The continued decrease surprised participants, who had expected existing home sales to climb by 1.0 percent to a rate of 5.04 million from the 4.99 million originally reported for the previous week. Meanwhile, the Labor Department released a report showing first-time claims for unemployment benefits fell more than expected in the week ended February 16. The report said initial jobless claims dropped to 216,000, a decrease of 23,000 from the previous week's unrevised level of 239,000. Dow Jones Industrial Average declined 103.81 points or 0.40 percent to 25850.63, Nasdaq dropped 29.36 points or 0.39 percent to 7459.71 and S&P 500 was down by 9.82 points or 0.35 percent to 2774.88.


Crude oil futures settled lower on Thursday after a US government report revealed that domestic supplies climbed for a fifth straight week as production jumped to a record level. The Energy Information Administration (EIA) reported that domestic crude supplies rose a fifth straight week, up 3.7 million barrels for the week ended February 15. That was a bit more than the 3.5 million-barrel rise expected by S&P Global Platts. The American Petroleum Institute data on Wednesday showed an increase of 1.3 million barrels. However, overall signs of declines in world-wide output capped price losses for the session. Benchmark crude oil futures for April declined 20 cents or 0.4 percent to settle at $56.96 a barrel on the New York Mercantile Exchange. April Brent crude was little changed, inching lower by a penny to end at $67.07 a barrel on London's Intercontinental Exchange.


Indian rupee ended weaker against the US dollar on Thursday, on the back of consistent demand for the greenback from state-run banks and importers. Investors failed to get solace with Prime Minister Narendra Modi's statement that the Indian economy is based on sound fundamentals and will in the near future double in size to $5 trillion. Traders even overlooked a private report stating that India will remain the fastest growing major economy, much ahead of China, in the next decade 2019-28. The rupee's losses were mainly caused by a firm dollar against some global currencies overseas. On the global front, dollar inched up on Thursday after minutes from the Federal Reserve's last meeting revived expectations for a possible US rate hike this year while investors shifted their focus back to trade issues for fresh directional cues. Finally, the rupee ended at 71.24, 14 paise weaker from its previous close of 71.10 on Wednesday.


The FIIs as per Thursday'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 5913.11 crore against gross selling of Rs 4630.23 crore, while in the debt segment, the gross purchase was of Rs 949.62 crore with gross sales of Rs 2613.67 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.83 crore against gross selling of Rs 9.35 crore.


The US markets ended in red on Thursday pressured by disappointing readings on the state of the US and European economies. Asian markets are trading lower on Friday following weakness on Wall Street as investors nervously watched the US-China trade talks in Washington. Indian markets shrugged off early weakness and ended higher for second straight session on Thursday, with auto, banking, pharma and metal stocks rallying amid buying by foreign and domestic institutional investors. Today, the markets are likely to make a negative start on weak global cues amid cautiousness over US-China trade talks coupled with disappointed economy data in US. Traders will be concerned with rating agency Moody's statement that the fresh round recapitalisation of 12 state-run banks is positive as it will help them improve their core capital but a complete turnaround is still away due to the large quantum of legacy bad loans. It said these banks are far from a complete turnaround as large volumes of problem-loans will still continue to cap improvements in profitability and capitalisation, constraining their credit profiles. However, some support may come later in the day with Niti Aayog's note stating that the host of reforms undertaken by the government has transformed India into the fastest-growing major economy along with the macroeconomic stability not witnessed in the past. It added the country's growth has decisively increased over the last five years and is much higher than the average growth among the emerging and developing economies. Some support may also come with Prime Minister Narendra Modi's statement that India is on the way to becoming a $5 trillion economy soon and hoped that the country would to be among world's top three economies in the next 15 years. Traders may take note of the Reserve Bank of India's monetary policy committee (MPC) said in minutes that India needs to take steps to boost economic growth as the inflation outlook remains low. Meanwhile, Retirement fund body Employees' Provident Fund Organisation (EPFO) has announced an increase in interest rate to 8.65 percent from 8.55 percent on PF deposits for 2018-19, to its 6 crore subscribers. There will be some buzz in the reality sector stocks with report that the proposed bid by the Centre to reduce GST on the under-construction houses to a maximum of 5 per cent without input tax credit (ITC) has been welcomed by developers who think it will revive demand.


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  • BPCL is planning to raise funds up to Rs 2,000 crore during the current financial year through private placement of unsecured NCDs subject to market conditions.
  • Bharti Airtel has lost 15.01 lakh subscribers in December 2018 taking its customer base to 34.02 crore. 
  • The Government will give ONGC pricing and marketing freedom for yet to be developed discoveries and will charge less royalty for raising production from existing fields. 
  • Reliance Industries' telecom arm -- Reliance Jio Infocomm has added 85.64 lakh customers in December 2018.
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