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NSE Intra-day chart (25 May 2018)
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Market Commentary 28 May 2018
Markets likely to make positive start as oil prices decline


Extending previous session's gains, Indian equity benchmarks ended the Friday's trade in green terrain with frontline gauges recapturing their crucial 34,900 (Sensex) and 10,600 (Nifty) levels, as oil prices eased on expectations of a gradual increase in output from Russia and other large producers. Markets made an optimistic start and traded with traction throughout the day, as traders took encouragement with Care Ratings' report forecasting the country's GDP growth to accelerate to 7.5% this financial year, from 6.6% in the last fiscal, on better performance from the industrial and agricultural sectors. Headline inflation, lending rates, fiscal prudence, current account deficit (CAD) and exchange rates, however, are the areas of concern. Some support also came with NITI Aayog vice chairman Rajiv Kumar's statement that states have the capacity and must reduce the duty on petrol, while the Centre should create fiscal space to deal with the impact of spurt in oil prices. The rising crude prices in the international market prompted state-owned oil companies to raise domestic prices for 11th day in a row. Petrol costs Rs 77.47 a litre in Delhi and diesel Rs 68.53 a litre. Key indices extended buying in last leg of trade as traders remained optimism after capital market regulator Securities and Exchange Board of India (SEBI) allowed omnibus trades at the Gujarat International Finance Tec-city (GIFT City), India's only international financial service centre (IFSC). An omnibus structure allows an investor trade through a broker or service provider with confidentiality. Meanwhile, Maharashtra Chief Minister Devendra Fadnavis has said that fuel prices will come down once the Centre builds a consensus to bring petrol and diesel under the Goods and Services Tax (GST). Finally, the BSE Sensex rose 261.76 points or 0.76% to 34,924.87, while the CNX Nifty was up by 91.30 points or 0.87% to 10,605.15.


The US markets ended the choppy day of trade mostly in red terrain as some traders were away from their desks, looking to get a head start on the long Memorial Day weekend. Geopolitical uncertainty also kept some traders on the sidelines following President Donald Trump's decision to call off the historic summit with North Korean leader Kim Jong Un. In a post on Twitter on Friday morning, Trump seemed pleased with the North Korean response to the cancellation of the planned meeting. The tweet from Trump came after the North's state-run Korean Central News Agency carried a statement by Vice Foreign Minister Kim Kye-gwan. In the statement, Kim indicated North Korea remains willing to hold talks with the U.S. and expressed a willingness to give Trump the time and opportunity to reconsider his decision. Meanwhile, traders largely shrugged off the latest batch of U.S. economic data, including a report from the Commerce Department showing a bigger than expected decrease in durable goods orders in the month of April. The durable goods orders slumped by 1.7 percent in April after spiking by an upwardly revised 2.7 percent in March. The street had expected orders to drop by 1.4 percent. Excluding a pullback in orders for transportation equipment, however, durable goods orders climbed by 0.9 percent in April after rising by 0.4 percent in March. Ex-transportation orders had been expected to increase by 0.5 percent. The Dow Jones Industrial Average declined 58.67 points or 0.24 percent to 24,753.09 and the S&P 500 was down by 6.43 points or 0.24% to 2,721.33, while the Nasdaq was up by 9.43 points or 0.13 percent to 7,433.85.


Extending losing streak for the fourth straight day, crude oil futures ended sharply lower to finish at their lowest levels in weeks on Friday, as reports said Organization of the Petroleum Exporting Countries (OPEC) and Russia are considering lifting production by as much as 1 million barrels a day to meet the shortfall in supply from Iran and Venezuela. Data on Friday showing the biggest weekly rise in the number of active U.S. oil rigs, which suggests a possible uptick in production, also contributed in the decline in prices. The number of active U.S. rigs drilling for oil was up 15 at 859 this week. That was the largest weekly rise since the week ended February 9. Benchmark crude oil futures for July delivery fell $2.83 or 4 percent to settle at $67.88 a barrel on the New York Mercantile Exchange. July Brent crude slipped $2.35 or 3 percent to settle at $76.44 a barrel on London's Intercontinental Exchange.


Continuing strong recovery momentum for the second day, Indian rupee ended considerably stronger against dollar on Friday, as banks and exporters continued to sell the US currency. Traders took some encouragement with Care Ratings' report forecasting the country's GDP growth to accelerate to 7.5 per cent this financial year, from 6.6 per cent in the last fiscal, on better performance from the industrial and agricultural sectors. Sentiments remained optimistic with Union Oil Minister Dharmendra Pradhan's statement that the Centre is deliberating on an immediate solution to deal with rising fuel prices. The rupee was also bolstered by the strong run in the local equity markets. On the global front, dollar resumed its rise on Friday after a wobble caused by US President Donald Trump's decision to cancel a summit with North Korea. Finally, the rupee ended at 67.77, 57 paise stronger from its previous close of 68.34 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 4455.84 crore against gross selling of Rs 5040.72 crore, while in the debt segment, the gross purchase was of Rs 60.32 crore with gross sales of Rs 782.61 crore. Besides, in the hybrid segment, the gross selling was of Rs 26.00 crore against no buying.


The US markets ended mostly lower on Friday, as investors kept an eye on geopolitical headlines. After President Donald Trump called off a June 12 summit with North Korea, a senior official from Pyongyang said its leader Kim Jong Un is still willing to meet. Asian markets were trading mixed in early deals, with the decline in oil prices weighing on energy stocks, while investors digested weekend news regarding US-North Korea relations. Indian equity benchmarks edged higher for the second straight session on Friday as oil prices eased on expectations of a gradual increase in output from Russia and other large producers. Today, the markets are likely to make an optimistic start as oil extended a steep decline in the previous session, helping ease recent fears over inflation, current account and fiscal deficits. Traders will get some support with Industry chamber CII's statement that businesses across several key sectors are seeing firm growth in sales and orders, indicating that the economy is on a recovery path and investments will pick up. CII said the impact of sustained structural reforms is now being felt on the ground as a mammoth economy is turning around. Some support will also come with CARE Ratings' report stating the country's industrial output is expected to log five to six per cent growth in this fiscal, bettering 4.3 per cent growth rate clocked in the previous fiscal. Adding to the optimism, a private report said India's economy may have expanded by 7.1-7.5% in the January-March quarter - driven by manufacturing and construction - compared with 7.2% in the third quarter, independent experts said ahead of the release of official data next week. Meanwhile, the finance ministry is planning to set up a fund under the National Investment and Infrastructure Fund (NIIF) dedicated for strategic investments. However, there will be some concern on report that foreign investors have pulled out a massive $4 billion (over Rs 26,700 crore) from capital markets (equity and debt) so far this month, primarily due to surge in global crude prices. In April, they had pulled out more than Rs 15,500 crore, which was the steepest outflow in 16 months.


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Indian Oil






  • Maruti Suzuki's parent company -- Suzuki Motor Corporation and Toyota have agreed to start discussing new joint projects in the fields of technological development, vehicle production, and market development.  
  • Sun Pharma has reported a rise of 6.97% in its consolidated net profit at Rs 1308.96 crore for Q4FY18 as compared to Rs 1223.71 crore for Q4FY17. 
  • GAIL has reported around 4-fold jump in its net profit at Rs 1020.92 crore for Q4FY18 as compared to Rs 260.16 crore for Q4FY17.  
  • L&T's construction arm - L&T Construction's Transportation Infrastructure business has won a major Design & Build order from the DMTC worth Rs 3191 crore.
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