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NSE Intra-day chart (26 September 2018)
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Market Commentary 27 September 2018
Markets to make positive start of F&O expiry session


Indian equity benchmarks ended the sluggish day of trade with marginal losses, as traders remained on sidelines ahead of September F&O expiry session due on Thursday. Investors will also keenly watch US Fed meet outcome due later in the day for fresh cues in the markets. Markets soon after a positive start turned negative, as street got cautious with a private report stating that even though India's economy is growing at a fast pace, the higher educated are reporting the highest rate of unemployment against the national average. The report also revealed that the unemployment scenario is most severe in the northern states of the country. Afterwards, markets traded in a tight band as some concerns came with another private report stating that after US, India is likely to suffer highest economic damage from climate change. The report further noted that Carbon dioxide emissions are costing the Indian economy up to $210 billion every year. Traders failed to get any sense of relief the commerce ministry's report that India will impose duties on imports within the norms of the World Trade Organisation (WTO) to protect domestic industry and boost the economy. However, losses remain capped with report that India's fiscal deficit during the first five months (April-August) of the current fiscal (FY19) has shown improvement. The fiscal deficit stood at 94.7% of the Budget Estimate (BE) at August-end of FY19, better than 96.1% of BE at August-end of the last financial year. Traders also got some relief with the commerce and industry ministry stating that the government's export promotion measures, implementation of minimum standards for imports, and continued healthy inflow of remittances by non-resident Indians will help control the country's rising current account deficit (CAD). Market participants also got some comfort with report that maintaining India's growth forecast at 7.3% for 2018, an international development finance institution, Asian Development Bank (ADB) has said that the economy continues on a robust growth path and is likely to grow at 7.6% during 2019, as goods and services tax and demonetisation effects abate as expected. Finally, the BSE Sensex declined 109.79 points or 0.30% to 36,542.27, while the CNX Nifty was down by 13.65 points or 0.12% to 11,053.80.


Erasing all of their earlier gains, the US markets ended lower on Wednesday after the Federal Reserve raised interest rates and signaled a continued gradual path of increases. The Federal Reserve raised interest rates by 25 basis points, as widely anticipated. The Fed also dropped the phrase that its policy remains accommodative. However, Fed Chairman Jerome Powell emphasized that the removal of the word should be taken as an indication that the economy is performing as expected. Powell said that the US economy is in a particularly bright moment, which would point to continued increases in rates. But he also said that inflation doesn't seem likely to spike, which would allow the Fed to continue on its gradual path to raise rates off the record lows they set following the 2008 financial crisis. Aside from the Federal Open Market Committee, issues surrounding trade remained at the top of investors' list of worries. While Wall Street has repeatedly ignored the threat of rising tariff tensions, focusing instead on strong economic data and corporate fundamentals, trade jitters have led to short-term volatility on fears that the situation could spiral out of control. On the economic front, the Commerce Department released a report showing new home sales rebounded much more than expected in the month of August. The report said new home sales soared by 3.5 percent to an annual rate of 629,000 in August after slumping by 1.6 percent to a revised rate of 608,000 in July. Dow Jones Industrial Average declined 106.93 points or 0.40 percent to 26,385.28, the S&P 500 slipped 9.59 points or 0.33 percent to 2,905.97 and Nasdaq was down by 17.10 points or 0.21 percent to 7,990.37.


Crude oil futures settled lower on Wednesday after a US government report revealed that domestic supplies of crude oil unexpectedly edged higher for the first time in six weeks. According to the data released by the Energy Information Administration (EIA), crude supplies in the US unexpectedly increased in the week ended September 21, rising by nearly 1.9 million barrels. However, prices for crude briefly pared some of their losses after President Donald Trump ratcheted up pressure on allies to adhere to coming US sanctions on Iranian crude during a United Nations Security Council meeting. Benchmark crude oil futures for November declined 71 cents or 1 percent to settle at $71.57 a barrel on the New York Mercantile Exchange. November Brent crude was down by 53 cents or 0.65 percent to settle at $81.34 a barrel on London's Intercontinental Exchanged.


Indian rupee ended marginally higher against dollar on Wednesday, owing to dollar sale by exporters and banks. Traders got some support with Finance Minister Arun Jaitley's statement that the new insolvency law, indirect tax regime and demonetization will help drive India's growth rate and sustain it at 8%. Investors also took note of the government's data showing that fiscal deficit touched 94.7% of the FY18 estimate at end of August, marginally better than 96.1% at the same point last fiscal. In absolute terms, fiscal deficit at end of August was Rs 5.91 lakh crore. On the global front, dollar was higher on Wednesday, as investors awaited policy cues from the Federal Reserve, which is widely expected to raise interest rates later in the day.  Finally, the rupee ended at 72.62, 7 paise stronger from its previous close of 72.69 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 6109.07 crore against gross selling of Rs 9791.16 crore, while in the debt segment, the gross purchase was of Rs 297.25 crore with gross sales of Rs 678.42 crore. Besides, in the hybrid segment, gross selling was of Rs 0.99 crore against no buying.


The US markets ended lower on Wednesday after the Federal Reserve confirmed it would continue to embark on tighter monetary policy. Asian markets were trading mixed in early deals on Thursday as investors assessed commentary from the Federal Reserve that reaffirmed the US economy is strong enough to warrant another interest-rate increase by the end of this year. The Indian markets ended Wednesday's choppy trading session with marginal losses as investors remained on sidelines ahead of US Federal Reserve's policy outcome. Today, the markets are likely to make positive start but trading is likely to be volatile on the back of futures and options (F&O) expiry of September contracts later in the day. Traders will be getting some encouragement with The United Nations Conference on Trade and Development (UNCTAD) expecting India's economy to grow 7% in calendar year 2018 compared with 6.2% in 2017. The body said that an expansion in services and higher demand for exports has led to a moderate recovery in industrial production in its Trade and Development Report. There will be some support with Finance Minister Arun Jaitley's statement that India has large avenues of growth to sustain a GDP increase of 7-8 per cent for two decades, unlike any other major economy. However, there will be some cautiousness with a United Nations trade report stating that the world economy remains on a shaky ground a decade after the 2008 financial crisis as the global economic growth is spasmodic and many economies are operating below potential. Meanwhile, the government has raised import duties on 19 items, including jet fuel and air conditioners, as it looks to check the widening current account deficit resulting from high crude oil prices and the rupee dipping to a historic low. The enhanced duty rates, which will make these imported goods expensive, will come into effect from midnight of September 26-27. There will be some buzz in banking sector stocks with the Finance Ministry's statement that it would examine the capital demands raised by public sector banks including Punjab National Bank and Central Bank. Also, there will be some reaction on telecom sector stocks with report that the government expects to attract $100 billion in investments and generate four million jobs in the telecom sector as it approved a new policy for the industry. The policy also envisages 50 Mbps of broadband connectivity to every citizen in five years.


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  • Coal India has received an approval for revision of add on over notified price of NEC coal G-1 to G-5 grades prices with effect from September 27, 2018. 
  • Maruti Suzuki India has partnered with Zydus Hospitals to set up a modern Polyclinic facility at Becharaji in Gujrat. 
  • Hero MotoCorp will make an upward revision in the ex-showroom prices of its motorcycles and scooters, effective October 3rd, 2018. 
  • Reliance Industries has made a follow-on investment of $8 million in US-based artificial intelligence firm Netradyne.
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