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NSE Intra-day chart (22 July 2019)
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Market Commentary 23 July 2019
Markets likely to make mildly positive start amid firm global cues


Extending southward journey for third straight session, Indian equity benchmarks ended the Monday's trade with a cut of over half a percent. Markets started the session on pessimistic note, as sentiments remain dampened with the Reserve Bank of India's (RBI) data showing that after touching record highs, the foreign exchange reserves declined by $1.113 billion to $428.797 billion in the week to July 12 - the first fall after four consecutive weeks of gains - due to a fall in foreign currency assets. Markets traded in tight band throughout the day as continuous selling by foreign investors post the presentation of the Budget on July 5 and corporate results for April - June 2019 quarter that failed to enthuse investors, dented the overall market sentiment. Some cautiousness also crept in with report that the Ministry of Statistics and Programme Implementation indicated as many as 345 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.28 lakh crore owing to delays and other reasons. Traders shrugged off reports that Asian Development Bank (ADB) has lowered the inflation forecast for India during the current financial year by 0.2 percentage points to 4.1 percent, on the back of gain in rupee and cut in the country's GDP projection. The market participants overlooked NITI Aayog Vice Chairman Rajiv Kumar's statement that India will achieve Gross domestic product (GDP) growth of 8 percent plus from fiscal year 2020-2021 onwards as structural reforms such as the Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC) are set to produce the benefits. Meanwhile, SEBI has tweaked the formats for limited review and audit report of listed entities in order to align them with the revised auditing standards. This will also be applicable to entities whose accounts are to be consolidated with the listed entity. Finally, the BSE Sensex lost 305.88 points or 0.80% to 38,031.13, while the CNX Nifty was down by 73.05 points or 0.64% to 11,346.20.


The US markets ended higher on Monday as investors adjusted expectations around a widely anticipated rate cut by the Federal Reserve at the end of the month and optimism about upcoming earnings news, as a slew of big-name companies are due to report their quarterly results this week. Amazon, Coca-Cola, AT&T, Boeing, Caterpillar, Facebook, Alphabet, Intel, McDonald's, and Twitter are just a few of the companies due to report their quarterly results. According to FactSet data, 79 percent of S&P 500 companies have reported better than expected quarterly earnings so far this earnings season. Traders were also reluctant to make significant moves amid a quiet day on the US economic front, looking ahead to reports on new and existing home sales, durable goods orders, and second quarter GDP in the coming days. Besides, US-China trade negotiations were in focus, after reports that the two sides would soon meet face-to-face. US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin would travel to Beijing next week. Also supporting equity markets were reports that the Congress and the White House had reached a deal to increase spending levels and suspend the federal debt limit for two years. Dow Jones Industrial Average added 17.70 points or 0.07 percent to 27171.90, Nasdaq gained 57.65 points or 0.71 percent to 8204.14 and S&P 500 was up by 8.42 points or 0.28 percent to 2985.03.


Crude oil futures settled higher with gains of over a percent on Monday as investors watched an increasingly complicated situation in the Persian Gulf after Iran late last week seized a British-flagged tanker, and as the UK faces a change in leadership. Oil prices also saw support after Libya's National Oil Corporation late Friday temporarily suspended operations at the Sharara oil field after an unidentified group shut down of a pipeline valve, but production from the oil field resumed early Monday. Meanwhile, the International Energy Agency (EIA) said it is ready to act quickly and decisively in the event of a disruption to oil flow in the region to ensure adequate global oil supplies. Benchmark crude oil futures for August rose 59 cents or 1.1 percent to settle at $56.22 a barrel on the New York Mercantile Exchange. September Brent gained 79 cents or 1.3 percent to settle at $63.26 a barrel on London's Intercontinental Exchange.


Indian rupee ended weaker against the US dollar on Monday amid heavy selling in domestic equities and rising crude oil prices. Traders remained concerned about the Reserve Bank of India's (RBI) data showing that after touching record highs, the foreign exchange reserves declined by $1.113 billion to $428.797 billion in the week to July 12 - the first fall after four consecutive weeks of gains - due to a fall in foreign currency assets. Besides, dollar's strength against major global currencies overseas largely led to weaker rupee sentiment. However, losses remain capped as some optimism remained among the traders with Asian Development Bank (ADB) has lowered the inflation forecast for India during the current financial year by 0.2 percentage points to 4.1 percent, on the back of gain in rupee and cut in the country's GDP projection. On the global front, dollar pushed higher against the yen on Monday as investors tempered expectations for an aggressive Federal Reserve interest rate cut later this month. Finally, the rupee ended at 68.92, 12 paise weaker from its previous close of 68.80 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 segment, the gross buying was of Rs 4815.69 crore against gross selling of Rs 5899.51 crore ,while in the debt segment, the gross purchase was of Rs 1839.37 crore with gross sales of Rs 1111.95 crore. Besides, in the hybrid segment, the gross buying was of Rs 11.25 crore against gross selling of Rs 4.93 crore.


The US markets closed in green on Monday as investors awaited key central bank meetings for direction on the path of interest rates and earnings from marquee names including Facebook and Amazon that are set to report this week. Asian markets are trading higher on Tuesday as investors braced for a busy week of US corporate earnings and potential developments in trade negotiations. Indian markets extended losses for third straight session on Monday led by losses in financial services stocks amid concerns over foreign fund outflows and weak global cues. Today, the start of session is likely to be slightly in green tracking positive trend in global markets. Some support will come with report that betting on the infrastructure theme, Minister of Information and Broadcasting Prakash Javadekar said that in the next five years, the government is planning to invest around Rs 100 lakh crore in that sector. Some support will also come with Reserve Bank of India (RBI) Governor Shaktikanta Das' statement that he sees signs of a recovery in economic growth and further monetary policy steps will depend on incoming data. Besides, the government has set a target of adding 1.3 crore income tax filers in the current financial year against 1.1 crore new filers last year. However, there may be some cautiousness with report that investments through participatory notes (P-notes) in the capital market slipped to Rs 81,913 crore in June after posting growth for the previous four months. Traders may take note of report that the Economic Advisory Council to the Prime Minister (EAC-PM) member Rathin Roy has urged the government to issue a white paper on medium-term fiscal framework, arguing that it would be difficult to meet the budgetary tax collection target for 2019-20. He also expressed his reservations over the government's decision to start raising a part of its gross borrowing programme from external markets in foreign currencies. There will be some buzz in the power stocks with report that the private transmission industry wants the government to initiate a number of policy changes which would give them more flexibility in network planning. There will be some reaction in sugar stocks with report that outstanding payment dues to sugarcane farmers have shot up by 54 times in just one year, as sugar mills grapple with tight liquidity amid a surge in production. Sugar mills have held back Rs 15,565 crore of the sugarcane-growing farmers in 2018-19, which was Rs 285 crore in the previous year. There will be some important earnings announcements too to keep the markets buzzing.


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  • Axis Bank has received approval for raising funds up to Rs 18,000 crore through an issue of equity shares, depository receipts or convertible securities. 
  • Bajaj Auto has launched an all-new version of its entry-level motorcycle model CT110 priced in the range of Rs 37,997 and Rs 44,480. 
  • Reliance Industries' telecom arm -- Jio has become the top mobile service provider in the Kolkata circle. 
  • Tata Steel is planning to raise $600 million in FY20 to fund the second phase of increasing production capacity at its Kalinganagar plant to 8 mtpa from 3 mtpa, and refinance old loans.
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