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NSE Intra-day chart (25 June 2019)
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Market Commentary 26 June 2019
Benchmarks likely to start marginally in red amid weak global cues


Indian equity benchmarks gained the lost ground to end Tuesday's session near their day's high points. Markets made a negative start of the day, with a report that unaccounted wealth outside the country held by Indians was estimated in the range of $216.48 billion to $490 billion over various periods between 1980 and 2010. As per the report, the sectors where unaccounted income is found to be the highest included real estate, mining, pharmaceuticals, pan masala, gutkha, tobacco, bullion, commodity, film, and education. But, key indices staged strong recovery in noon deals, amid reports that the Ministry of Micro, Small and Medium Enterprises is striving to increase the number of micro and small industries in the country on a sustainable basis through implementation of various schemes and programmes. The Ministry provides better credit facility, technology up-gradation and skilling to boost the entire MSME eco-system. In the last leg of the trade, bourses traded at intraday high peaks, with the India Meteorological Department's (IMD) statement that India's annual monsoon rains have covered nearly half of the country and conditions are favourable for further advancement into the central and western parts this week. It added that the monsoon's progress will help farmers to accelerate sowing of summer-sown crops, which has been lagging due to a delay in the arrival of monsoon rains. The street took a note of Former Vice Chairman of NITI Aayog, Arvind Panagariya's statement that India's economy needs to grow at 8-10 per cent annually if good jobs have to be provided to those joining the workforce, emphasising that an export-led growth is very critical for creation of good jobs in the country. Finally, the BSE Sensex gained 311.98 points or 0.80% to 39,434.94, while the CNX Nifty was up by 96.80 points or 0.83% to 11,796.45.


The US markets ended lower on Tuesday  after Federal Reserve Chairman Jerome Powell said the central banks was still monitoring the economy for signs of weakness and would seek to avoid a knee-jerk reaction in terms of cutting benchmark interest rates. Sentiments remained weak after a report released by the Commerce Department unexpectedly showed a steep drop in new home sales in the US in the month of May. The Commerce Department said new home sales plunged by 7.8 percent to an annual rate of 626,000 in May after tumbling by 3.7 percent to a revised rate of 679,000 in April. Street had expected new home sales to climb by 1 percent to a rate of 680,000 from the 673,000 originally reported for the previous month. The unexpected drop in new home sales came as sales in the West plummeted by 35.9 percent to a rate of 125,000 and sales in the Northeast showed a 17.6 percent nosedive to a rate of 28,000. Besides, reflecting the escalation in trade and tariff tensions earlier this month, the Conference Board released a report showing a substantial deterioration in US consumer confidence in the month of June. The Conference Board said its consumer confidence index tumbled to 121.5 in June from a downwardly revised 131.3 in May. Street had expected the index to dip to 132.0 from the 134.1 originally reported for the previous month. Dow Jones Industrial Average dropped 179.32 points or 0.67 percent to 26548.22, Nasdaq declined 120.98 points or 1.51 percent to 7884.72 and S&P 500 was down by 27.97 points or 0.95 percent to 2917.38.


Crude oil futures ended lower on Tuesday on the back of heightened tensions between the US and Iran. Iran sharply criticized new US sanctions targeting the Islamic Republic's supreme leader and other top officials, saying the measures spell the permanent closure for diplomacy between the two nations. Iran's president described the White House as afflicted by mental retardation. President Hassan Rouhani went on to call the sanctions against Supreme Leader Ayatollah Ali Khamenei outrageous and idiotic, especially as the 80-year-old Shiite cleric has no plans to ever travel to the US. Besides, the Energy Information Administration will release weekly on US petroleum supplies on Wednesday. Benchmark crude oil futures for July declined 7 cents or 0.1 percent to settle at $57.83 a barrel on the New York Mercantile Exchange. However, August Brent gained 19 cents or 0.3 percent to settle at $65.05 a barrel on London's Intercontinental Exchange.


Indian rupee erased all gains made earlier in the day and closed little changed against the US dollar on Tuesday as US-Iran tensions rise. Traders took a note of Former Vice Chairman of NITI Aayog, Arvind Panagariya's statement that India's economy needs to grow at 8-10 per cent annually if good jobs have to be provided to those joining the workforce, emphasising that an export-led growth is very critical for creation of good jobs in the country. On the global front, US dollar fell to a three-month low against the euro and dropped to its weakest against the Japanese yen since early January as the prospect of monetary easing by the Federal Reserve knocked demand for the US currency. Finally, the rupee ended at 69.36, 1 paise weaker from its previous close of 69.35 on Monday.


The FIIs as per Tuesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 3491.16 crore against gross selling of Rs 3434.49 crore, while in the debt segment, the gross purchase was of Rs 2591.03 crore with gross sales of Rs 2796.79 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.77 crore against gross selling of Rs 2.83 crore.


The US markets declined on Tuesday as investors weighed commentary from Federal Reserve officials and shares of technology companies slumped. Asian markets are trading mixed on Wednesday after US Federal Reserve Chairman Jerome Powell tempered expectations for a potential interest rate cut. Indian markets snapped tow-day losing streak and ended higher with notable gains on Tuesday led by gains in Reliance Industries, HDFC, Axis Bank, ICICI Bank, HDFC Bank, ITC and State Bank of India. Today, the start is likely to be slightly in red following weak cues from global markets. There will be some cautiousness with former RBI deputy governor Rakesh Mohan's statement that manufacturing growth is not consistent with India's overall economic growth figures. He added that the country cannot grow at 8 per cent without manufacturing sector recording 10 per cent growth. However, some support may come later in the day with Federation of Indian Export Organisations' (FIEO) statement that the government's focus to improve logistics, ease of doing business and modern trade infrastructure will help exports to touch $1 trillion in the next three years. It added that India has huge potential to boost its exports of goods and services from the current $535 billion. Traders may take note of report that monsoon rains have covered most parts of cane, cotton, and soybean fields in western India and some parts of rice-sowing areas in central and northern India. Meanwhile, traders' body CAIT said that the government is expected to release a draft of national retail policy in the next 10 days for comments. There will be buzz in the banking stocks with Crisil's report that higher recoveries and slowdown in fresh bad loans are likely to reduce banks non-performing loans (NPAs) to nearly 8 percent by March 2020. It added that public sector banks (PSBs), which account for over 80 percent of the NPAs in the system, should see their gross NPAs decline over 400 bps to close to 10.6 percent by March 2020 from a peak of 14.6 percent in March 2018. There will be some reaction in power stocks with the government's statement that India plans to add 500 gigawatts (GW) of renewable energy to its electricity grid by 2030, in a bid to clean up air in its cities and increase the share of renewables in its electricity grid. 


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  • TCS is increasing its holding in TCS Japan, its joint venture with Mitsubishi Corporation, one of Japan's largest integrated business enterprises. 
  • Dr. Reddy's Laboratories has launched Tobramycin Inhalation Solution, USP a therapeutic equivalent generic version of TOBI Inhalation Solution, approved by the USFDA. 
  • Bharti Airtel is offering FREE Hello Tunes to its postpaid and prepaid mobile customers through Wynk Music app. 
  • LIC has sold over 5.25 crore shares, representing about 2 percent stake, of Axis Bank through open market transaction.
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