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NSE Intra-day chart (26 May 2017)
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Market Commentary 29 May 2017
Markets to make a flat-to-positive start

Indian benchmark indices showcased yet another courageous performance and went on to outclass indices around the world by vivaciously rallying by around a percentage in the session and settling above the psychological 9,550 (Nifty) and 31,000 (Sensex) levels for the first time ever. Thursday's optimism got spilled over into the Friday's session helping the frontline indices in extending the winning momentum for second successive session as higher derivatives rollover led to strong follow-up buying in index heavyweights on the first day of June series. Broader market outperformed benchmark indices with the S&P BSE Midcap and the S&P BSE Smallcap indices gaining over one and half a percent each. Investors continued to build hefty positions across the board as sentiments got a boost after the report that India retained its numero uno position being the world's top most greenfield FDI investment destination for the second consecutive year, attracting $62.3 billion in 2016. FDI by capital investment saw an increase of 2%to $62.3 billion in 809 projects during 2016 in India. The report has pointed that the global investment landscape has changed considerably in the last year as FDI gravitated to locations experiencing the strongest economic growth, while locations in recession or facing high levels of uncertainty saw major declines. Some support also came with private weather forecaster Skymet's statement that the increase in pre-monsoon showers across India is hinting at the arrival of monsoon 2017, which is not very far away. The weather forecasting agency predicted that monsoon will make an onset over Kerala by May 29, with a margin of error of three days. Meanwhile, Airline stocks gained traction on expectations that a slide in oil prices would reduce carriers' fuel cost. Crude oil skidded 5% after OPEC and allied producers announced extended output cuts that disappointed investors. Both Jet Airways and Global Vectra Helicorp jumped over 3%, while InterGlobe Aviation rose over a percent. Finally, the BSE Sensex gained 278.18 points or 0.90% to 31028.21, while the CNX Nifty was up by 85.35 points or 0.90% to 9,595.10.


After trending higher over the past several sessions, the US markets ended the choppy session flat on Friday, as traders expressed some uncertainty about the near-term outlook for the markets following recent volatility. Some traders were also already away from their desks, looking to get a head start on the long Memorial Day weekend. Traders failed to get any sense of relief with the latest economic data, including a report from the Commerce Department showing that the U.S. economy grew by much more than initially estimated in the first three months of the year. The Commerce Department said gross domestic product climbed by 1.2 percent in the first quarter compared to the previously reported 0.7 percent increase. The street had been expecting a more modest upward revision to the pace of GDP growth to approximately 0.9 percent. A separate Commerce Department report showed that new orders for manufactured durable goods pulled back by less than expected in the month of April. The report said durable goods orders slid by 0.7 percent in April after jumping by an upwardly revised 2.3 percent in March. The Nasdaq gained 4.94 points or 0.08 percent to 6,210.19 and S&P 500 was up by 0.75 points or 0.03 percent to 2,415.82, while Dow Jones Industrial Average edged lower by 2.67 points or 0.01 percent to 21,080.28.


Crude oil futures showed some recovery on Friday, after industry data showed the pace of increases in the U.S. rig count slowed. Oil Services firm Baker Hughes in its weekly report said that Drillers added two oil rigs for a total of 772 last week, though US energy firms added oil rigs for a record 19 weeks in a row but traders sensed it an end to the global supply glut that has kept oil prices below $50 for much of the past year. Meanwhile, Saudi Arabia's energy minister Khalid Al-Falih, said he expected a "healthy return" for US shale but remained confident that a boom in US shale won't derail OPEC's effort to tackle the demand and supply imbalance. Benchmark crude oil futures for July delivery ended higher by $0.90 or 1.8 percent to $49.80 on the New York Mercantile Exchange. In London, Brent crude for July delivery ended up by 1.2 percent to $52.09 on the ICE.


Maintaining its good form for the third day, Indian rupee ended higher against dollar on Friday due to sustained selling of the US currency by exporters and banks. Sentiments remained upbeat with private weather forecaster Skymet's statement that the increase in pre-monsoon showers across India is hinting at the arrival of monsoon 2017, which is not very far away. Some support also came with a private report stating that India maintained its number one position of being world's top most greenfield FDI investment destination for the second year in a row, attracting $62.3 billion in 2016. The rupee got additional support with increased foreign fund inflows along with higher domestic equity market, which zoomed to new highs. On the global front, British pound fell sharply against major crosses on Friday, after a poll showed a further narrowing of the Conservative Party's lead before the U.K.'s general election. Finally, the rupee ended at 64.44, 17 paise stronger from its previous close of 64.61 on Thursday.


The FIIs as per Friday'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 9181.50 crore against gross selling of Rs 8392.30 crore, while in the debt segment, the gross purchase was of Rs 429.86 crore with gross sales of Rs 636.57 crore.


The US markets made a mixed closing in the last session after a lackluster trade, despite a report showing that US economy grew by much more than initially estimated in the first quarter. GDP climbed by 1.2 percent compared to the previously reported 0.7 percent increase. The Asian markets have made mostly a positive start, while some of the markets are closed, Japanese and South Korean markets climbed amid low trading volume. Though, there was some cautiousness to as the North Korea fired another missile, which appeared to be a Scud variant. The Indian markets rallied in the last session with benchmarks adding around a percent to reach their fresh record highs. Some upbeat earnings and easing concerns over Fed rate hikes boosted the domestic market sentiments. Today, the start of the new week is likely to be in green but markets may remain cautious with the government slated to unveil GDP figures for the March quarter on Wednesday. Meanwhile, Confederation of All India Traders (CAIT) has said that classification of different items under various tax slabs of GST has created an environment of anxiety and concern among the trading community across the country. Market will be getting some support with the Employees Provident Fund Organisation (EPFO) approving hike in investment limit in exchange traded funds (ETFs) to 15 per cent, from the existing 10 per cent. There will be some buzz in the banking stocks, as the Finance Minister Arun Jaitley has said that poor performance by private investors and banks still remains a challenge for the Indian economy. He also said the banks have to recover their bad loans to boost private investment, as domestic private investment needs to pick up. In the peak earnings season there will be lots of important earnings announcements to keep the markets in action.


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  • USFDA has completed audit of Dr. Reddy's Laboratories' Formulations Srikakulum Plant Unit II, Andhra Pradesh on May 25, 2017 with zero observations.
  • Maruti Suzuki India will set up Automobile Skill Enhancement Centres across 15 Government run ITIs, across 11 states, in the next three months.
  • Bharti Airtel is currently offering 1,000 GB extra broadband data to customers on selective broadband plans.
  • Infosys and HP Inc have launched joint Retail Point of Sale and Enterprise Device as a Service solutions to help businesses accelerate digital transformation as part of the HP Global System Integrator Alliance Program.
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