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NSE Intra-day chart (24 October 2017)
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Market Commentary 25 October 2017
Markets to make a jubilant start on supportive cues

Indian equity benchmarks ended the volatile day of trade with quarter a percent gain on Tuesday, with Sensex and Nifty recapturing their crucial 32,600 and 10,200 levels respectively, ahead of Infosys' second quarter earnings to be released later in the day. Markets traded mostly in green throughout the session, as traders took encouragement with SBI's report that the government is likely to achieve its fiscal deficit target of 3.2 percent this financial year as the budgeted disinvestment receipts are on track to realise Rs 72,500 crore. The report noted that the government will able to meet the disinvestment target of Rs 72,500 crore as Rs 60,000 crore has already been achieved and hence the fear of low disinvestment receipts is completely unwarranted. Some support also came with Union Minister of Minority Affairs Mukhtar Abbas Naqvi's statement that the Goods and Services Tax (GST) will remain as a Good and Simple Tax in the coming days to come and will prove to be as a better medium for small traders and businessmen. Markets witnessed a sharp selloff in last leg of trade to enter into red terrain, but selling proved short-lived and markets soon regained their lost ground with traders taking support with a private report highlighting that post-demonetization and implementation of the GST, the current economic slowdown has bottomed out and the recovery of the economy would critically depend on the initiatives the government takes from now onwards. The report added that the slowdown has bottomed out, however, the stage and pace of recovery would critically depend on the initiatives that the government takes from now onwards to boost the growth momentum, especially the private sector investment. Investors took note that more respite could be on the way Small and Medium Enterprises (SMEs), with the GST council set to ease a string of procedures, including partial relief on penalties on late filing of GST returns. Finally, the BSE Sensex surged 100.62 points or 0.31% to 32,607.34, while the CNX Nifty was up by 22.85 points or 0.22% to 10207.70.

It was another high record day for the US markets and all the major averages touched new record highs after strong earnings from heavy-hitters Caterpillar and 3M. The world's largest construction and mining equipment maker, Caterpillar Inc, beat third-quarter profit and sales estimates and raised its full-year forecasts. Though, trading activity remained somewhat subdued in early deals, with lack of major U.S. economic data keeping some traders on the sidelines. Also, optimism for a tax overhaul slipped after a report, cited an aide of Senate leader Mitch McConnell, that three GOP Senators may not back the Republican tax bill. The Dow Jones Industrial Average rose by 167.80 points or 0.72 percent to 23441.76, the S&P 500 edged up by 4.15 points or 0.16 percent to 2569.13, and the Nasdaq gained 11.60 points or 0.18 percent to 6598.43.

Crude oil futures extended their gains on Tuesday after Saudi Arabia signalled its determination to end the global supply glut, also data expected to show crude oil supplies fell for the fifth-straight week lifted sentiment. Saudi oil minister Khalid al-Falih said Saudi Arabia is willing to "do whatever it takes" to rein in excess supplies. Though, the ongoing fluctuation of output in Iraq, continued to concern investors as crude supplies through Iraq's northern pipeline to Ceyhan in Turkey rose further. Pumping along the pipeline rose to 300,000 barrels per day (bpd) on Tuesday. Benchmark crude oil futures for December delivery ended higher by 57 cents or 1.1 percent at $52.47 a barrel on the New York Mercantile Exchange. Brent crude for December delivery added 1.52 percent to $58.33 a barrel on the ICE.

Erasing all the gains, Indian rupee ended marginally lower against dollar on Tuesday, on mild demand of dollar by banks and importers. Traders overlooked SBI's report that the government is likely to achieve its fiscal deficit target of 3.2 percent this financial year as the budgeted disinvestment receipts are on track to realise Rs 72,500 crore. However, weakening of dollar against other currencies overseas limited the rupee's losses. On the global front, the US dollar held largely steady against major rivals Tuesday, with the euro not finding much action after figures indicated eurozone economic growth slowed slightly this month. Finally, the rupee ended at 65.06, 5 paise weaker from its previous close of 65.01 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 7115.75 crore against gross selling of Rs 6781.96 crore, while in the debt segment, the gross purchase was of Rs 1178.82 crore with gross sales of Rs 605.13 crore.

The US markets ended at record highs in last session following the modest pullback seen in the previous session, supported by some upbeat earnings. The Asian markets have made mostly a positive start taking cues from the US markets. Japan's stocks opened higher while investors also awaited the unveiling of China's new leadership line-up following the conclusion of the country's 19th Party Congress. The Indian markets extended their gains in the last session on earnings optimism and amid muted cues from Europe. Today, the start is likely to be strong and the benchmarks will be extending gains on supportive global cues and on domestic factors. The PSU banking stocks will keep buzzing with the Union Cabinet approving a massive recapitalisation plan for public sector banks (PSBs) worth Rs. 2.11 lakh crore. Of this amount, Rs. 1.55 lakh crore would be raised through recapitalisation bonds. Another Rs. 76,000 crore would be available from budgetary support and raised through market borrowings. The whopping Rs 14 lakh crore package announced by the Union Cabinet apart from the massive recapitalisation plan for public sector banks, also include investments in key development sectors such as Rural Roads, Housing, Railways, Power, Highways and Digital Infrastructure. Traders will also be getting some support with Union Finance Minister Arun Jaitley's statement that the Indian economy was on a strong wicket with sound macro-economic fundamentals. The IT sector stocks too will be in action reacting to the Infy numbers, which reported a net profit of Rs. 3,726 crore for the quarter ended September 30, 2017, up 7 per cent sequentially and 3.4 per cent year-on-year. But, the Nasdaq-listed company has cut its full-year revenue guidance, forecasting slower-than-industry growth. Infosys said FY18 revenue would grow at 5.5-6.5% in constant currency. The company had previously forecast growth of 6.5-8.5%. There will be lots of important earnings to keep the markets buzzing. 

Support and Resistance: NSE (Nifty) and BSE (Sensex) 


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  • SBI has signed an agreement with Escorts to finance farmers for purchase of Escorts tractors.
  • Bharti Airtel has added over 10 lakh users in September 2017.
  • M&M has invested Rs 16 crore to install LED lights at 18 manufacturing sites in a tie-up with the state- run Energy Efficiency Services.
  • HDFC Bank has reported 20.13% rise in its net profit at Rs 4151.03 crore for the quarter ended September 30, 2017 as compared to Rs 3455.33 crore for the same quarter in the previous year.

News Analysis