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NSE Intra-day chart (24 July 2018)
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Market Commentary 25 July 2018
Markets to make a green start on positive global cues


Extending northward journey for third straight session, Indian equity benchmarks ended Tuesday's trade at record closing high levels, with frontline gauges surpassing their crucial 36,800 and 11,100 marks. Markets made an optimistic start as sentiments remained upbeat with report that the overall exports from India to BRICS saw an upswing of 7.5% in Q1 2018 Y-o-Y in terms of total volumes, while the country's imports from BRICS nations is reduced by 3.5%. Traders also took some encouragement with report that the commerce ministry is working on an export promotion strategy to boost shipments of chemicals, plastics and allied products sector to push the growth of the country's overall exports. For the formulation of the strategy, the ministry has constituted a sub-group to deliberate upon the issues of the sector. Adding to the optimism Union Finance Minister Piyush Goyal, a couple of days after goods and services tax (GST) rates were cut on 100 items, said rising tax collections will further help reduce the tariffs. He said, the Directorate General of Anti-Profiteering has been directed to keep a tab on manufacturers of sanitary napkins, so that benefits of the GST rate cut are passed on to consumers. However, markets pared all of their early gains as sudden selloff witnessed in noon deals with traders turning cautious on Securities and Exchange Board of India's (SEBI) data showing that investments through participatory notes into Indian capital markets plunged to over nine-year low of Rs 83,688 crore at June-end amid stringent norms put in place by the SEBI to check the misuse of these instruments. But, recovery in last leg of trade helped markets to end at record closing high levels, as traders took some support after the US Congress asked the Trump Administration to come up with a strategy that can reflect a measurable progress in its defence ties with India. Finally, the BSE Sensex surged 106.50 points or 0.29% to 36,825.10, while the CNX Nifty was up by 49.55 points or 0.45% to 11,134.30.


The US markets ended mostly higher on Tuesday, powered by a number of positive earnings results.  Investors welcomed strong corporate earnings reports from Google parent Alphabet and other companies. Gains by technology companies and health care stocks outweighed losses in consumer goods manufacturers, retailers and other sectors. Smaller-company stocks, which have been beating the rest of the market this year, turned sharply lower as investors weighed the implications of the Trump administration's decision to send billions in emergency aid to farmers hurting from tariffs stemming from the US trade dispute with China. The Trump administration announced a $12 billion plan to assist farmers who have been hurt by President Donald Trump's trade disputes with China and other trading partners. The plan, which focuses on Midwest soybean producers and others targeted by retaliatory measures, would include direct assistance for farmers, purchases of excess crops and trade promotion activities aimed at building new export markets. Though, issues surrounding trade remained in focus after President Donald Trump said that tariffs are the greatest. Escalating tensions between the US and its major trading partners have been a major concern of investors of late, amid fears that the situation could evolve into a full-blown trade war. The Dow Jones Industrial Average surged 197.65 points or 0.79 percent to 25241.94 and the S&P 500 gained 13.42 points or 0.48 percent to 2820.40, while the Nasdaq was down by 1.11 points or 0.01 percent to 7840.77.


Crude oil futures ended higher on Tuesday, as concerns about possible supply shortage resurfaced due to rising tension between the US and Iran. Traders were looking ahead to a report on US crude inventories from the American Petroleum Institute, due on July 25. It is widely expected that oil stockpiles may have declined last week. Meanwhile, trade war concerns linger after Trump's comments last week that his administration was looking at imposing tariffs on over $500 billion worth of Chinese goods to the US in the event of China failing to back down on its trade policies. Benchmark crude oil futures for September gained 63 cents or 0.9 percent to settle at $68.52 a barrel on the New York Mercantile Exchange. September Brent crude settled higher by 38 cents or 0.50% at $73.44 a barrel on London's Intercontinental Exchange.


Extending weakness for the second straight day, Indian rupee depreciated against dollar on Tuesday, hurt by fresh demand for the American currency from importers. Traders remained cautious with Securities and Exchange Board of India's (SEBI) data showing that investments through participatory notes into Indian capital markets plunged to over nine-year low of Rs 83,688 crore at June-end amid stringent norms put in place by the SEBI to check the misuse of these instruments. However, weakness in the greenback against other currencies overseas along with a positive closing of local bourses limited the rupee's fall. On the global front, pound edged up on Tuesday as the dollar skidded lower but gains for the British currency were capped by fresh angst over Brexit and doubts about the economy. Finally, the rupee ended at 68.95, 9 paise weaker from its previous close of 68.86 on Monday.


The FIIs as per Tuesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 4428.07 crore against gross selling of Rs 4261.57 crore, while in the debt segment, the gross purchase was of Rs 2399.78 crore with gross sales of Rs 863.64 crore. Besides in the hybrid segment, the gross buying was of Rs 0.96 crore against gross selling of Rs 2.82 crore.


The US markets ended mostly higher on Tuesday, as investors welcomed strong corporate earnings reports. Asian markets were trading mostly in green in early deals on Wednesday, following gains on Wall Street and hopes that China will boost fiscal support for its economy, while long-term US yields hovered near six-week highs on speculation the Bank of Japan could be less accommodative. Indian equity markets ended Tuesday's session on optimistic note, with both Sensex and Nifty closing at fresh record high, on the back of continued capital inflows and positive cues from global markets. Today, the markets are likely to make optimistic start, with Prime Minister Narendra Modi's statement that India is emerging as a global manufacturing and start-up hub and many of the Made-in-India products, including cars and smartphones, are today exported to nations from whom the country used to import. Traders will be getting some encouragement with Chairman of the PHD Chamber of Commerce and Industry, Anil Khaitan's statement that India needs to focus on exports and regulatory reform to propel the Indian economy forward. However, there will be some cautiousness with report that the International Monetary Fund (IMF) has cautioned India it should not rely on global financial markets to finance its current account deficit (CAD) when it goes above 3% of gross domestic product (GDP). The Fund basically advised India to rely more on stable sources of foreign inflow - foreign direct investment (FDI). Meanwhile, a private report stated that the Reserve Bank of India (RBI) will go for status quo in key policy rates in its August policy review. Besides, under fire for reports of a spurt in black money held by Indians in Swiss banks, Finance Minister Piyush Goyal said such money decreased by around 35% in 2017 year-on-year, and by 80% since the Narendra Modi government took over in 2014. There will be some buzz in PSU banking stocks, with the minister of state for finance Shiv Pratap Shukla's statement, citing data from the Reserve Bank of India, that the gross bad loans of public sector banks (PSBs) hit 15% of advances in 2017-18, while the gross non-performing assets (NPA) ratio for PSBs stood at 14.6% in 2017-18. There will be some important result announcements to keep the markets in action.


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  • IOC is planning to make an investment of around Rs 12,000 crore in the Haldia refinery and pipeline infrastructure in West Bengal.
  • Mahindra's Truck and Bus Division, a part of the $20.7 billion Mahindra Group, has unveiled the Furio, its brand new range of Intermediate Commercial Vehicles. 
  • Maruti Suzuki has launched its advanced telematics solution Suzuki Connect for its NEXA customers. 
  • Government think tank Niti Aayog has signed a statement of intent with Lupin's CSR arm.
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