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NSE Intra-day chart (23 August 2017)
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Market Commentary 24 August 2017
Markets to make another green start ahead of long weekend

Wednesday turned out to be a fabulous day of trade for Indian equity benchmarks, with frontline gauges recapturing their crucial 31,500 (Sensex) and 9,850 (Nifty) levels. Sentiments remained up-beat since morning, as markets made a gap-up opening with a blog on Asian Development Bank's website, stating that the Goods and Services Tax (GST) in India will benefit the lower and lower-middle income class as it is likely to reduce the tax rate on goods. It further stated that in general, GST is likely to reduce the tax rate on goods as compared to previously, while tax rates on services are expected to increase. Afterwards, markets traded with confidence in a tight band for most part of the session with traders taking encouragement with the Financial Stability & Development Council's (FSDC) statement that India has macro-economic stability today on the back of improvement in its macro-economic fundamentals and structural reforms with the launch of the GST. The Council, comprising regulators, took note of the overall stability that has been achieved on the back of improvements in macro-economic fundamentals, structural reforms with the launch of the GST, action being taken to address the twin balance sheet challenge and financial market confidence. Markets extended gains in last leg of trade which mainly helped markets to end near intraday high levels, as some support came with the report that the loan portfolio of micro-finance institutions (MFIs) increased by 26% to Rs 35,045 crore in the first quarter ended June 2017. Some support also came with the launch of the Mentor India Campaign, a strategic nation building initiative to engage leaders who can nurture and guide students at more than 900 Atal Tinkering Labs.  Finally, the BSE Sensex surged 276.16 points or 0.88% to 31,568.01, while the CNX Nifty was up by 86.95 points or 0.89% to 9,852.50.


The US markets closed lower on Wednesday, with the main indexes undoing some of the solid gains from the previous session as investors turned their attention to the Jackson Hole, Wyo., meeting of global central bankers and digested comments from President Donald Trump's Tuesday night rally in Phoenix. Wednesday's modest bout of selling could be partly due to controversial comments from Trump, who late Tuesday said that he's ready to shut down the government to win funding for a border wall with Mexico. Trump, during a rally with his supporters in Phoenix, also warned of the possible termination of the North American Free Trade Agreement. On the economy front, new-home sales tumbled in July, a discouraging development for a market starved for supply. Sales of newly-constructed homes were at a seasonally adjusted annual rate of 571,000. That was 9.4% lower than an upwardly-adjusted June rate of 630,000, and 8.9% below the year-ago level. The median sales price in July was $313,700, 6.3% higher than a year ago. At the current pace of sales, it would take 5.7 months to exhaust all supply, among the highest ratios of the past few years. The Dow Jones Industrial Average lost 87.8 points or 0.40 percent to 21,812.09, the Nasdaq dropped 19.07 points or 0.30 percent to 6,278.41, while the S&P 500 edged lower by 8.47 points or 0.35 percent to 2,444.04.


Crude oil futures extended their gains on Wednesday after the government report said crude oil prices dropped for the eighth consecutive week. Data showed US supplies of crude oil fell for an eighth-straight week while fears of falling demand for gasoline eased, following a bigger-than-expected decline in gasoline inventories. Energy Information Administration (EIA) showed US crude-oil inventories were down 3.3 million barrels last week. Gasoline inventories, fell by roughly 1.2m barrels, while distillate stockpiles rose by 28,000 barrels. Benchmark crude oil futures for October delivery ended up by $0.67 or 1.2 percent to $48.41 on the New York Mercantile Exchange. In London, Brent crude for October delivery ended higher by 1.39 percent at $52.59 a barrel on the ICE.


Indian rupee ended marginally weaker against the American currency on Wednesday, due to fresh dollar demand from banks and importers amid foreign fund outflows. Investors remained concerned with rating agency ICRA's latest report which has estimated that India's gross value added (GVA) growth is likely to slow down to 6.3% in April-June quarter (Q1) of fiscal year 2017-18 from 7.6% in the same period of pervious year. However, dollar's weakness against other currencies overseas and strong domestic equity market restricted the rupee's losses. On the global front, dollar edged down against the yen on Wednesday after US President Donald Trump raised the spectre of a government shutdown to fulfil a campaign pledge, but overall moves among major currencies were limited ahead of this week's Jackson Hole global central bankers' conference. Finally, the rupee ended at 64.11, 1 paise weaker from its previous close of 64.10 on Tuesday.


The FIIs as per Wednesday'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 3474.55 crore against gross selling of Rs 4202.18 crore, while in the debt segment, the gross purchase was of Rs 2215.10 crore with gross sales of Rs 1086.46 crore.


The US markets gave up some ground in the last session after surging in the prefious one. Though, the selling pressure remained subdued, limiting the downside for the major averages. Traders reacted to comments made by President Donald Trump at a rally in Phoenix, Arizona that he would build the wall on the border with Mexico even if it meant shutting down the government. The Asian markets have made a mixed start, with some indices trading in red on concerns about the Trump administration's ability to enact its fiscal agenda. The Japanese market too was in red despite the yen decline. The Indian markets showed a smart surge in the final hours of last session trade and the major benchmarks posted gains near to a percent by the end. Today, the start is likely to be in green despite the mixed global cues, though there could be some consolidation too ahead of the long weekend. Traders will be eyeing the conference of a central bankers at Jackson Hole, Wyoming, beginning today, where US Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are both due to speak. The PSU banking stocks will be in focus after the Union Cabinet on Wednesday gave in-principle approval to delegate to a select panel of ministers the task of overseeing their mergers. Meanwhile, Insolvency & Bankruptcy Board of India (IBBI) chairperson has said that resolution of indebtedness of a firm will be the top priority of all constituents of the insolvency and bankruptcy mechanism in the interest of the stakeholders and it will think about liquidation only if it finds that the resolution is hard to come by. An RBI report has stated that India Inc's overseas direct investment fell over 47 per cent to $ 1.77 billion during July 2017. Indian companies had invested $ 3.35 billion in the same month of last year. There will be some buzz in the media stocks, as the Finance Ministry has said that the rate of Goods and Services Tax (GST) applicable on selling of advertisement space in print media would depend on the terms of the contract between the newspaper, advertisement agency and the client.


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