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NSE Intra-day chart (22 May 2018)
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Market Commentary 23 May 2018
Markets likely to make pessimistic start on subdued global cues


Snapping five days losing streak, Indian equity benchmarks ended the volatile day of trade with modest gains on Tuesday. After making a cautious start, key gauges gained traction as traders took some encouragement with ICRA expecting the Gross Domestic Product (GDP) growth to improve to 7.4% in January-March 2017-18 from 7.2% in the third quarter, on account of good rabi crop harvest and improved corporate earnings. The Central Statistics Office (CSO) is scheduled to come out with GDP estimate for the fourth quarter (Q4) of fiscal 2017-18 and provisional annual estimates for the year 2017-18 on May 31. Some support also came with NITI Aayog's vice-chairman Rajiv Kumar exuding confidence that Indian economy will achieve 9% growth rate on sustained basis by 2022 on the back of reforms like GST, demonetisation and the Insolvency and Bankruptcy Code (IBC). Some relief also came with report that the central government's capital expenditure (capex) in April 2018 saw a jump of 48% compared with the same month last year, the consequence of a second consecutive year of an advanced budget. The biggest gainers as a result of this capex boost were ministries of defence, railways and road transport. However, gains remained capped as anxiety remained among the traders with a foreign brokerages' report stating that rise in oil prices may lead to inflationary trends in the country, forcing the Reserve Bank of India (RBI) to hike rates by 0.25% in the August policy review. It further noted that the apex bank, however, may opt for a status quo in rates at the forthcoming review in June. Some concerns also came with SBI's Ecowrap report stating that India's current account deficit is expected to widen to 2.5% of the GDP in the financial year 2018-19, on the back of rise in the crude oil prices. Finally, the BSE Sensex rose 35.11 points or 0.10% to 34,651.24, while the CNX Nifty was up by 20.00 points or 0.19% to 10,536.70.


The US markets ended lower on Tuesday, with major indices turning decisively negative in afternoon trading and ending near their lows of the day as uncertainty over trade policy and other geopolitical issues remained high. Optimism over trade had spurred a stock rally in Monday's session, after Treasury Secretary Steven Mnuchin said that the Trump administration would put the trade war on hold while working out details of a deal between the countries. Trump's comments seemed to offset Mnuchin's view, as he was asked if he is happy with how U.S.-China trade talks were going, President Donald Trump said, not really, and said negotiations have a long way to go. Other geopolitical tensions also continued to hover in the background, with uncertainty over a historic meeting between Trump and North Korea's dictator Kim Jong Un. Vice President Mike Pence warned in an interview late Monday that North Korea cannot play Trump where nuclear disarmament is concerned. On Tuesday, Trump said a planned summit with Un may happen later than currently scheduled. Meanwhile, laying out new demands for Iran on Monday, the White House said any new nuclear deal with the U.S. would require Iran to stop enriching uranium and to pull its support for militant groups in the Middle East. The demands were met by immediate rejection from Iran. The Nasdaq surged 15.58 points or 0.21 percent to 7,378.46, the S&P 500 jumped 8.57 points or 0.31 percent to 2,724.44 and the Dow Jones Industrial Average was down by 178.88 points or 0.72% to 24,834.41.


After hitting a three-and-half-year high, crude oil futures ended lower on Tuesday, as the prospect of global supply disruptions remained elevated amid looming sanctions on Iran and falling Venezuelan crude output. Besides, the United States imposed new sanctions on Venezuela on Monday following President Nicolas Maduro re-election on Sunday - viewed as illegitimate. While the immediate sanctions were aimed at restricting the South American country from selling assets, reports said sanctions on the country's oil industry may soon follow. Benchmark crude oil futures for June delivery declined 11 cents or 0.20 percent to settle at $72.13 a barrel on the New York Mercantile Exchange. July Brent crude gained 35 cents or 0.40 percent to settle at $79.57 a barrel on London's Intercontinental Exchange.


Snapping two day falling streak, Indian rupee bounced back against the Greenback on Tuesday, on the back of fresh dollar selling by exporters and some banks. Traders took some support with ICRA's report stating that the GDP growth rate is expected to improve to 7.4% in Q4 FY2018 from 7.2% in Q3 FY2018, exceeding the implicit forecast of 7.1% embedded in the CSO's Second Advance Estimate of National Income for 2017-18. Besides, dollar losing sheen against some other currencies overseas also supported the local unit. However, gains were limited as some concerns came with SBI's Ecowrap report stating that India's current account deficit is expected to widen to 2.5 percent of the Gross Domestic Product (GDP) in the financial year 2018-19, on the back of rise in the crude oil prices. On the global front, dollar pulled back from a five-month high against major rivals on Tuesday, as traders opted to take profits after the recent rally, while Forex traders focused on testimony to the UK Treasury Select Committee. Finally, the rupee ended at 68.04, 8 paise stronger from its previous close of 68.12 on Monday.


The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4855.74 crore against gross selling of Rs 5294.21 crore, while in the debt segment, the gross purchase was of Rs 599.09 crore with gross sales of Rs 2049.11 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.39 crore against gross selling of Rs 4.56 crore.


The US markets ended lower on Tuesday, unable to sustain positive momentum from the previous session despite overtures from China. Asian stocks are broadly lower, with benchmark indexes in China, Hong Kong and Japan down between 0.4 percent and 1.1 percent, as investors eyed risks from North Korea to Turkey. Indian equity benchmarks gave up earlier gains to end with marginal gains on Tuesday, tracking mixed global cues. Today, the markets are likely to make negative start amid weak global cues. Sentiments will remain downbeat on report that Fuel prices hit a fresh record high on Tuesday as petrol prices rose 30 paise to Rs 84.70 per litre in Mumbai. Similarly, diesel prices rose 27 paise to Rs 72.48 per litre in Mumbai. Markets may get some support later in the day on private report that an open data ecosystem will impact India's GDP by $22 billion, or the equivalent of two times the amount raised through the sale of 4G spectrum in 2017. The report claims that an open data ecosystem has the power to double farmers' income by 2022, provide Universal Health coverage and provide microloans to three million plus micro, small and medium enterprises among other benefits. Aviation stocks will be buzzing on report that Civil Aviation Ministry will urge the Finance Ministry to bring the particular fuel type under the ambit of GST. In this regards, a proposal will be made to the Ministry of Finance to bring air turbine fuel (ATF) under the ambit of GST to contain the rise in jet fuel cost due to high global crude oil prices. There will be buzz in Chemical related stockson report that Commerce Ministry's investigation arm DGAD has said it is terminating its anti-dumping probe into import of a Chinese chemical used in dye industry. The move comes following domestic industry's request to terminate the probe in the imports of Meta-Phenylene Diamene-4-Sulphonic Acid from the neighbouring nation.


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  • L&T's construction arm -- L&T Construction's Buildings & Factories business has bagged orders worth Rs 4,033 crore. 
  • M&M is planning to raise funds by way of issuance of Securities including but not limited to secured/unsecured redeemable NCDs under Private Placement basis for an aggregate amount not exceeding Rs 5,000 crore. 
  • SBI has reported net loss of Rs 7,718.17 crore for Q4FY18 as compared to a net profit of Rs 2,814.82 crore for Q4FY17. 
  • Wipro Gallagher Solutions, a Wipro company has launched its NetOxygen SaaS loan origination solution for mortgage lenders.
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