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NSE Intra-day chart (22 September 2017)
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Market Commentary 25 September 2017
Markets to make a cautious start, stimulus announcement eyed

Indian equity benchmarks witnessed absolute carnage on Friday and went home with a cut of around one and a half percent, breaching their crucial 32,000 (Sensex) and 10,000 (Nifty) levels. After a gap-down opening, markets never looked confident of recovering and gradually extended their losses till end to close near intraday lows on renewed geo-political worries after a report that North Korea could respond to fresh sanctions with a hydrogen bomb in the Pacific. Back on domestic turf, sentiments remained dampened on expectations that the government's plan for a stimulus to halt an economic slowdown may have a negative impact on the fiscal deficit. Market participants also remained concerned with report that the Organisation for Economic Co-operation and Development (OECD) trimmed India's growth forecast for the current financial year, citing the temporary impact of the rollout of the Goods and Services Tax (GST) and demonetization, expecting the economy to expand at a slower pace than China. OECD said India's economy will likely grow 6.7% in FY18, lower than its estimate 7.3% in June. The Paris-based group of 35 advanced and emerging countries cut its forecast for India's growth to 7.2% in FY19 from 7.7% estimated earlier. Meanwhile, traders failed to get any sense of relief with report that the government is considering a plan to loosen the fiscal deficit target so that it could spend an additional Rs 500 billion ($ 7.7 billion) in the financial year ending in March 2018. Traders also paid no heed to reports that given the lack of considerable space both on the monetary and fiscal front to support economic growth, part of the country's forex reserves can be used to support GDP numbers. Finally, the BSE Sensex tumbled 447.60 points or 1.38% to 31,922.44, while the CNX Nifty was down by 157.50 points or 1.56% to 9,964.40.


The US markets ended the lackluster session near their neutral lines on Friday on geopolitical concerns amid an escalating war of words between North Korean leader Kim Jong Un and President Donald Trump. Kim described Trump's threat to ‘totally destroy' North Korea as mentally deranged behavior. Kim also called Trump's remarks to the United Nations General Assembly ‘rude nonsense' and claimed he was not frightened by the president's threat. The back-and-forth between Trump and Kim came as North Korean Foreign Minister Ri Yong Ho has said his country may consider testing a hydrogen bomb in the Pacific Ocean. Nonetheless, overall trading activity was somewhat subdued amid a relatively quiet day on the U.S. economic front. Traders remained on sidelines ahead of some important macro-economic data slated to be released in next week. Nasdaq rose 4.23 points or 0.0.07 percent to 6,426.92 and the S&P 500 was up by 71.62 points or 0.0.6 percent to 2,502.22, while the Dow Jones Industrial Average was down by 9.64 points or 0.04 percent to 22,349.59.


Crude oil futures moved higher on Friday, as investors shrugged off the outcome of an Opec-led meeting in which oil producers failed to reach a decision to extend the production-cut agreement. Russian Energy Minister Alexander Novak said Russia and OPEC can wait until at least January before announcing further production quotas. In May, Opec and non-Opec members agreed to extend production cuts of 1.8m barrels per day for a period of nine months until March 2018 but rising production from the US, Nigeria and Libya has undermined the oil cartel's efforts to curb excess supply. Benchmark crude oil futures for November delivery ended higher by 11 cents or 0.2 percent at $50.66 a barrel on the New York Mercantile Exchange. Brent crude for November delivery gained 27 cents to $56.70 a barrel on the ICE.


After hitting near 6-month low, Indian rupee recouped most of its losses and ended tad higher against dollar on Friday, due to selling of the American currency by banks and exporters. Local currency got some support with World Trade Organisation (WTO) raising its 2017 forecast for world trade growth to 3.6% from the 2.4% estimated earlier, a development which augurs well for India. It also said that the predicted growth would also represent a substantial improvement on the lackluster 1.3% increase in 2016. The domestic unit also found support from dollar weakened overseas. However, extremely bearish local equity markets and unabated foreign fund outflows, restricted the further move. On the global front, dollar fell broadly against most rivals on Friday, losing its post-Fed meeting glow as international discord around North Korea bubbled up again. Finally, the rupee ended at 64.79, 1 paise stronger from its previous close of 64.80 on Thursday.


The FIIs as per Friday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4890.30 crore against gross selling of Rs 5939.73 crore, while in the debt segment, the gross purchase was of Rs 276.09 crore with gross sales of Rs 420.67 crore.


The US markets extended their lackluster trade in the last session and made a mixed closing on geopolitical concerns amid an escalating war of words between North Korean leader Kim Jong Un and President Donald Trump. The Asian markets have made mostly a lower start though firm crude oil prices figure are preventing too much damage. The Japanese market was up as yen declined on speculation Japan's prime minister will press for a stimulus package alongside his expected call for a snap election later in the day. The Indian markets plummeted in the last session on geopolitical worries; with across the board selling dragging the major benchmarks lower by over a percent. Today, the start is likely to remain cautious on subdued global cues, however things may improve with the progress of trade as there are expectation that Prime Minister Narendra Modi would unveil the much-awaited stimulus package during a scheduled speech to the BJP national executive meeting later today. The Chief Economic Adviser Arvind Subramanian has said that the economy is facing multiple headwinds and there is a need to attack them on various fronts. Arvind Subramanian has been tasked with preparing details of the pressure points facing the economy and the probable remedies. Also, there will be some support with a statement from Finance Ministry ahead of the Reserve Bank of India's (RBI) bi- monthly monetary policy decision to be announced on October 4 that there is scope for an RBI rate cut at the next policy review as retail inflation continues to be low. Meanwhile, the RBI has eased rules governing foreign investment in corporate bonds by excluding rupee-denominated securities from its overall debt limit. There will be some buzz in the insurance stocks, as a report from industry body Assocham has said that the insurance industry in the country is undergoing multiple disruptions in its functioning and the trend will accelerate in the future.


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Yes Bank






  • Tata Motors has entered into the growing compact SUV segment with the commercial launch of its compact SUV -- the Tata Nexon.
  • YES Bank has gone in for 'rationalisation' of its workforce in a bid to address certain 'redundancies'.
  • ONGC's overseas arm - ONGC Videsh has reportedly sold a cargo of Russian Sokol crude loading in November at its highest premium in 2017 on robust demand in Asia.
  • Infosys' wholly owned subsidiary - Infosys Finacle has entered into partnership with ToneTag to offer sound-based contactless payments solution.  
News Analysis