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NSE Intra-day chart (26 July 2017)
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Market Commentary 27 July 2017
Markets to start in green on F&O expiry day

Wednesday turned out to be a historic day of trade for Indian equity benchmarks, with Nifty settling above magical five-digit mark of 10,000 for the first time ever on the back of positive sentiments flow among the market participants during the ongoing corporate earnings season. Sentiments remained up-beat since morning, as markets started the session in green with report that the government approved an addition of 7.47 lakh new registration applications under the Goods and Services Tax (GST) regime. Traders also took some encouragement with private report that Foreign portfolio investors (FPIs) pumped in over $25.4 billion into the Indian equity and debt market segments thus far in calendar year 2017 (CY17). The flows have come in on expectation of a revival in India's economic growth and recent government-backed reforms, especially in the banking sector. It was the last leg of trade where markets extended its northward journey and ended above the all time closing high levels, with traders taking support with report stating that a team of officers, led by the commerce secretary, is holding detailed consultations with states to clear the bottlenecks that are hampering exports. Traders shrugged off private brokerage firm report which highlighted that retail inflation in India is expected to rise noticeably from trough in June to 4.4 percent in the second half of this year, driven mostly by food prices and the base effect. The report added that although inflation has bottomed, in the medium term it is expected to see a significant uptrend and rise above the RBI's target. Finally, the BSE Sensex surged 154.19 points or 0.48% to 32,382.46, while the CNX Nifty was up by 56.10 points or 0.56% to 10,020.65.


The US markets closed higher on Wednesday, with all three gauges recording all-time highs, supported by better-than-expected corporate results, and after the Federal Reserve offered an update to its monetary-policy outlook. The Federal Reserve kept interest rates unchanged and said it expected to start winding down its massive holdings of bonds relatively soon in a sign of confidence in the US economy. The Fed kept its benchmark lending rate in a target range of 1.00 percent to 1.25 percent, as expected, and said it was on track to continue the slow path of monetary tightening that has lifted rates by a percentage point since 2015. On the economy front, sales of newly-constructed homes remained steady in June even as the market remains starved for inventory. New-home sales were at a seasonally adjusted annual rate of 610,000, the Commerce Department said. That was 0.8% above May's 605,000 rate, after a slight downward revision. June's tally was 9.1% higher than a year ago. The government's new-home sales data, which are based on small samples, are choppy and often heavily revised. The Dow Jones Industrial Average added 97.58 points or 0.45 percent to 21,711.01, Nasdaq added 10.58 points or 0.16 percent to 6,422.75, while S&P 500 edged higher by 0.7 points or 0.03 percent to 2,477.83.


Crude oil futures moved further high on Wednesday, as investors cheered data showing supplies of U.S. crude fell by more-than-expected for a fourth-straight week. A report from the Energy Information Administration (EIA) showed crude and gasoline stockpiles fell by more than expected last week. EIA said that crude inventories fell by 7.2 million barrels in the week to July 21. Gasoline inventories fell by roughly 1m barrels against expectations of a draw of 614,000 barrels while distillate stockpiles fell by 1.9m barrels. Benchmark crude oil futures for August delivery gained $0.61 or 1.8 percent to $48.75 on the New York Mercantile Exchange. In London, Brent crude for August delivery ended higher by 1.27 percent at $50.54 a barrel on the ICE.


Indian rupee recovering from the early losses ended slightly higher on Wednesday, supported by fund inflow with local equity markets closing at record high levels and Nifty for the first time ending above 10000 mark. Earlier, the domestic currency made a soft start extending the weakness to another day on account of buying of American currency by banks and importers. There was some cautiousness ahead of the Federal Open Market Committee meeting outcome later in the day. On the global front, the dollar edged higher against the other major currencies on Wednesday, as investors were awaiting the Federal Reserve's policy decision, while the pound was slightly lower against the US dollar. Finally, the rupee ended at 64.36, 2 paise stronger from its previous close of 64.38 on Tuesday.


The FIIs as per Wednesday'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 5636.61 crore against gross selling of Rs 5315.48 crore, while in the debt segment, the gross purchase was of Rs 336.96 crore with gross sales of Rs 650.39 crore.


The US markets extended their gains in last session, sending the Dow Jones Industrial Average to a new record high on some good earnings, though the Federal Reserve failed to offer specifics about its plan to unwind its bloated balance sheet. The Asian markets have made mostly a positive start after FOMC voted to maintain its key interest rate at a 1.00 to 1.25 percent range, and on optimism about corporate earnings. The Indian markets rally mood extended in the last session and benchmarks surged for yet another day, with Nifty making history by closing above the 10000 mark for the first time. Today, the start of the F&O series expiry day is likely to be in green, as the US Fed maintained status quo on the policy rate, though it signalled that the balance sheet reduction process would begin 'relatively soon.'  Traders will be getting some support with news that retirement fund body the Employees' Provident Fund Organisation plans to pump in Rs 22,500 crore in exchange traded funds in 2017-18 following approval from the central board of trustees to increase the equity investment from 10 per cent to 15 per cent. Meanwhile, the government has said that the ongoing consolidation among telecom operators will result in efficient use of spectrum for better services, and six players in each service area will have adequate competition. The banking sector stocks will be buzzing as the government has said that a combined 5,076 cases of active banking frauds involving Rs 1 lakh or more causing losses of Rs 16,78,853 lakh were reported by 76 banks during 2016-17. Meanwhile, Reserve Bank deputy governor SS Mundra, with some large stressed firms challenging RBI's directives to banks to initiate proceedings against them under the Insolvency and Bankruptcy Code (IBC) in high courts, has said that nobody can be prevented from approaching the judiciary. The Infra sector will be under pressure on a Global Infrastructure Outlook report that  India is underperforming in terms of spending needs (in relation to GDP) in several infrastructure segments, within its peer group. There will be lots of important earnings too to keep the markets in action.


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



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Axis Bank





Tata Power





  • Axis Bank has reported 16.07% fall in its net profit at Rs 1305.60 crore for first quarter ended June 30, 2017.
  • Cipla and the product development partnership Medicines for Malaria Venture has launched 100 mg Artesunate Rectocaps/Rectal Artesunate Suppositories.
  • Hero MotoCorp has reported a rise of 3.50% in its net profit at Rs 914.04 crore for the quarter ended June 30, 2017.
  • GAIL (India) has launched a start-up initiative titled 'Pankh' to identify and promote innovative ventures. 
News Analysis