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NSE Intra-day chart (21 August 2017)
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Market Commentary 22 August 2017
Markets to make a cautious start on sluggish global cues

Indian equity benchmarks failed to hold on to their initial gains and ended in red terrain on Monday, breaching their crucial 9,800 (Nifty) and 31,300 (Sensex) levels, as weak global cues and fall of over 5% in Infosys continued to hurt sentiments. Markets, soon after a positive opening, started moving southward to enter into negative trajectory in second half of trade. Afterwards, key gauges never looked confident of recovering and gradually extended its losses till end to close near intraday lows, as investors opted to remain on sidelines ahead of the PM Narendra Modi's meet with industry leaders for policy inputs to build a ‘New India'. Sentiments remained dampened after the private report highlighted that consumer confidence in India declined in the second quarter of this year amid concerns regarding job security and lower optimism on employment prospects. Besides, cautionary spending by consumers towards the end of 2016 still had some impact on the quarter under consideration. Adding to the pessimism, the India Meteorological Department's (IMD) weekly press release highlighted that about a quarter of the country has received deficient rainfall in the first half of the monsoon, but hopes the situation will improve in the second half. The Met department states that there is a 4% deficit rain across the country, but 26% part of the country has received deficient rain. Markets extended losses on report that as many as 322 infrastructure projects worth Rs 150 crore or above each have seen cost overrun of Rs 1.71 lakh crore due to delays and other reasons by March 2017. Furthermore, according to the RBI data during the week to August 4, there was an incremental credit de-growth of Rs 1.1 trillion. This comes after a record low full year credit growth in FY17 when credit growth slipped to the lowest in the past six decades at 5.1%. This was the lowest since fiscal 1953 when it grew a tepid 1.8%.Finally, the BSE Sensex lost 265.83 points or 0.84% to 31,258.85, while the CNX Nifty was down by 83.05 points or 0.84% to 9,754.35.


The US markets closed mostly higher on Monday, with the Dow industrials and S&P 500 eking out modest gains and halting a two-session decline on a light-volume, while the Nasdaq finished in the red as investors remained cautious amid geopolitical tensions and ongoing domestic political turmoil. A new cycle of escalation near the Korean Peninsula looked set to begin as the US and South Korea on Monday kicked off annual military exercises that have a history of enraging North Korea. The near-term focus is on a speech by US Federal Reserve Chair Janet Yellen on Friday at the Fed's annual central banking conference in Jackson Hole, Wyoming. On the economy front, the Chicago Fed National Activity Index (CFNAI) was -0.01 in July from +0.16, as manufacturing and housing permits surprisingly weighed down solid economic growth. The Econoday forecast called for a reading from -0.13 to 0.25, with a consensus forecast of 0.22. Three of the four broad categories of indicators that make up the index decreased from June, and three of the four categories made negative contributions to the index in July. The Dow Jones Industrial Average added 29.24 points or 0.13 percent to 21,703.75, the S&P 500 edged higher by 2.82 points or 0.12 percent to 2,428.37, while the Nasdaq lost 3.4 points or 0.05 percent to 6,213.13.  


Crude oil futures turned lower on Monday, ahead of OPEC's meeting in Vienna. The cartel is expected to discuss its supply quota plan with Russia. Traders continue to lose faith in Opec's ability to stem the glut supply amid a producers meeting to discuss waning compliance with the deal curb production. Also weighing on oil prices were fears of falling demand for crude as the U.S. 'summer driving season' nears an end. Benchmark crude oil futures for October delivery ended down by $1.14 or 2.4 percent to $47.37 on the New York Mercantile Exchange. In London, Brent crude for October delivery ended lower by $1.08 at $51.62 a barrel on the ICE.


Indian rupee ended marginally higher against dollar on Monday as banks and exporters continued to sell the US currency amid persistent capital inflows. This is the second consecutive session when the rupee is traded higher against dollar. Investors took note of private report that India's foreign exchange reserves are expected to hit $400 billion by September, driven by robust capital inflows and weak credit offtake. However, dollar's strength against major global currencies overseas along with massive losses of domestic equity markets capped the rupee's gain. On the global front, dollar edged higher against euro, as investors remained cautious ahead of a closely-watched meeting of central bankers in Jackson Hole in Wyoming this week. Finally, the rupee ended at 64.13, 1 paise stronger from its previous close of 64.14 on Friday.


The FIIs as per Monday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity, the gross buying was of Rs 5035.17 crore against gross selling of Rs 6884.58 crore, while in the debt segment, the gross purchase was of Rs 1522.55 crore with gross sales of Rs 354.97 crore.


The US markets extending their sluggishness made a mixed closing in last session and major averages showed a lack of direction over the course of the trading session, with traders continuing to express concerns about President Donald Trump's ability to implement his pro-business agenda. The Asian markets have made mostly a positive start and the Japanese market too was showing modest gains as the yen snapped four days of gains and investors reassessed positions ahead of a meeting of central bankers. The Indian markets reversing all their early gains witnessed another sharp sell-off in the last session, dragged down by Infosys and deposing close to a percent again. Today, the start is likely to remain cautious on mixed global cues and some further downside can be expected before markets show some strength. Traders will be getting some support with DIPP's report that FDI flow into the country grew 37 per cent to $10.4 billion during the first quarter of this financial year. India received $7.59 billion FDI during April-June 2016-17. Meanwhile, Prime Minister Narendra Modi is slated to interact with 200 CEOs to attain their views and suggestions to carry forward the 'New India' initiative. The two-day discussion involves groups consisting of around 35 industry leaders and government secretaries, who will deliberate on an array of topics, namely- New India by 2022, Make in India, Cities of Tomorrow, World Class Infrastructure, Doubling Farmers Income and Fixing Finance: Reporting the Financial Sector. However, there will be some cautiousness too, with a survey stating that consumer confidence in India declined in the second quarter of this year amid concerns regarding job security and lower optimism on employment prospects. Oil & gas sector stocks will be in action, as the government has clarified that upstream oil and gas companies can avail an input tax credit (ITC) on Goods and Services Tax paid only on the value added products that are manufactured and covered under GST.


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  • Infosys would buy back 11.3 crore shares or 4.92% of equity capital at Rs 1,150 apiece.
  • IOC will invest about Rs 52,000 crore in expanding Paradip refinery and setting up petrochemical complex after the Odisha government agreed to restore part of tax incentives.
  • Tata Power has installed their first Electric Vehicle charging station at Tata Power Receiving Station at Vikhroli, Mumbai.
  • Tata Motors will invest more than Rs 40 billion to boost sales of its passenger vehicles and commercial vehicles.



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