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NSE Intra-day chart (27 August 2018)
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Market Commentary 28 August 2018
Markets likely to make positive start


Bulls went brisk on Dalal Street on Monday, with frontline gauges logging new record highs for yet another day, ending just shy of their crucial 11,700 (Nifty) and 38,700 (Sensex) levels. After a gap-up opening, there appeared not even an iota of profit booking in the session with benchmarks fervently gaining from strength to strength to end near intraday highs, as investors continued hunt for fundamentally strong stocks. Markets started the session on an optimistic note with report that former Niti Aayog vice-chairman Arvind Panagariya opined that rupee depreciation was long overdue, saying appreciated currency had hurt the country's exports. He further said India's macroeconomic management is sound and there was no reason to worry. Besides, the government is looking to complete nearly three-fourths of its disinvestment target by the end of December and has a pipeline of about 15 companies in which it will sell stakes to achieve this interim goal. Investors took encouragement with private report that India's twin deficit and inflation are at a far more comfortable position than in 2013. Markets extended gains after Finance Minister Arun Jaitley said that a series of reforms taken by the government transformed the weak economy. He also said that the reform measures has substantially cleaned up the system and made it more transparent, noting that decisiveness has led to easier decision-making and made the economy stand out before several other countries. Besides recent fall in oil prices and strong foreign portfolio investors' (FPI) inflows will also support the domestic currency. Foreign investors have pumped in a little over Rs 6,700 crore into the Indian capital markets so far this month on improvement on the macro front, better corporate earnings and correction in the mid and small-cap space. Some support came in with a report stating that India and Singapore have signed the Second Protocol amending the Comprehensive Economic Cooperation Agreement (CECA) in order to boost bilateral trade. Besides, a private report highlighted that the Centre has lined up plans to raise a massive Rs 1.7 lakh crore via the extra-budgetary resources (EBR) route in the current fiscal, up 110% from FY18. Finally, the BSE Sensex surged 442.31 points or 1.16% to 38,694.11, while the CNX Nifty was up by 134.85 points or 1.17% to 11,691.95.


Magnifying their last session's gains, the US markets ended higher on Monday with the S&P 500 and the Nasdaq closing at records for a second straight session as President Donald Trump confirmed reports the US has reached a preliminary trade deal with Mexico. The US and Mexico reached an agreement to enter into a new trade deal as President Donald Trump announced that he wants to drop the name North American Free Trade Agreement from an existing deal that includes Canada. The president said the new deal would be called the United States-Mexico Trade Agreement rather than NAFTA. Meanwhile, Trump indicated the US would soon begin negotiations with Canada but suggested that any agreement could be a separate deal. Besides, it is the first time the Nasdaq traded above 8,000, taking the tech-laden index 164 trading days to rise 1,000 points from 7,000. It marks the second 1,000-point advance for the Nasdaq this year, something that has not happened since 1999. On the economic front, a measure of the US economy from the Chicago Federal Reserve slowed in July from June's robust performance, owed in large part to lighter output at the nation's factories. The Chicago Fed's index of national economic activity registered at a positive 0.13 last month, down from an upwardly revised positive 0.48 in June. Dow Jones Industrial Average surged 259.29 points or 1.01 percent to 26049.64, the S&P 500 rose 22.05 points or 0.77 percent to 2896.74 and Nasdaq was up by 71.92 points or 0.91 percent to 8017.90.


Crude oil futures closed higher on Monday, sticking to a tight trading range as a committee of Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers reportedly revealed further progress in easing output curbs, as expected. Meanwhile, the Joint Ministerial Monitoring Committee said that countries participating in the oil production-cut pact that was implemented at the start of 2017 fell to 109% in July. Renewed US sanctions on Iran are also set to weigh on global supply. Benchmark crude oil futures for October gained 15 cents or 0.2 percent to settle at $68.87 a barrel on the New York Mercantile Exchange. October Brent crude added 39 cents or 0.5 percent at $76.21 a barrel on London's Intercontinental Exchange.


Indian rupee depreciated against the American currency on Monday. Rupee weakened with Reserve Bank of India's (RBI) data showing that India's foreign exchange (Forex) reserves slipped by $33.2 million during the week ended August 17. Traders also remain concerned with a private report stating that high borrowing costs and weakness in rupee is expected to impact corporates, while uncertainties in the global market has the potential to derail the global growth story. However, Former Niti Aayog's vice-chairman Arvind Panagariya's statement that rupee depreciation is not cause to worry and it was pending for a long time, failed to provide any support to rupee. On the global front, the dollar remained under some pressure after the head of the Federal Reserve suggested it would not speed up its pace of lifting interest rates. Finally, the rupee ended at 70.15, 24 paise weaker from its previous close of 69.91 on Friday.


The FIIs as per Monday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 4469.76 crore against gross selling of Rs 4524.51 crore, while in the debt segment, the gross purchase was of Rs 1036.44 crore with gross sales of Rs 1019.10 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.30 crore against gross selling of Rs 0.33 crore.


The US markets ended higher on Monday as the United States and Mexico closed a new trade deal, potentially removing a source of uncertainty that had been plaguing investors for months. Asian markets were trading in green in early deals on Tuesday amid hopes global tariff tensions were abating as the United States and Mexico made a deal to overhaul the North American Free Trade Agreement. Indian stock markets, after a day's breather, resumed their record-setting rally to scale new peaks on Monday supported by strong global cues after Powell's comment on fed rates. Today, the markets are likely to make an optimistic start as traders will be getting some encouragement with Economic policy think-tank, the National Council of Applied Economic Research (NCAER) in its latest report retaining India's growth forecast for the current fiscal at 7.4%, citing comfortable agricultural sector outlook and a marked improvement in the external sector. There will be some support with the Department of Industrial Policy and Promotion's (DIPP) latest data showing that foreign direct investment (FDI) in India grew by 23% to $12.75 billion during the April-June quarter of 2018-19, as compared to foreign fund inflows of $10.4 billion in April-June 2017-18. Traders will also be reacting to Commerce Minister Suresh Prabhu's statement that the government is working on a comprehensive strategy to double the country's exports by 2025. Traders may take note of finance minister Arun Jaitley's statement that the desire to achieve a high growth rate must be accompanied by strong macroeconomic fundamentals. Meanwhile, India has initiated probe into alleged dumping of a certain type of steel imported from Brazil, China and Germany following a complaint BY a domestic player. However, there may be some cautiousness with SBI research report stating that the country's current account deficit (CAD) is likely to touch 2.8% of GDP in the current financial year on surge in crude oil prices and moderate growth in exports. Besides, there will be some buzz in power sector stocks with a report that the Finance Ministry may soon hold talks with the Reserve Bank of India to resolve issues faced by the power sector.


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  • L&T's construction arm -- L&T Construction's Water & Effluent Treatment Business has won an EPC order worth Rs 1,394 crore from Government of Madhya Pradesh. 
  • Tata Motors has rolled out 1500th unit of Safari Storme GS800 meant for the Indian Armed Forces from its Pune-based facility. 
  • Bharti Airtel has expanded its partnership with Netflix in India through which subscribers of select Airtel Postpaid and V-Fiber Home Broadband plans will receive a three month gift of a Netflix subscription. 
  • GAIL India will launch a new portal to allow anyone to hire its vast pipeline network for transporting natural gas.
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