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NSE Intra-day chart (28 August 2017)
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Market Commentary 29 August 2017
Markets to make a soft start on weak global cues

Extending northward journey for fourth straight day, Indian equity benchmarks ended the session with a gain of around half a percent, recapturing their crucial 9,900 (Nifty) and 31,700 (Sensex) levels. Sentiments remained jubilant through the session and key gauges after a gap-up opening traded in fine fettle. Sentiments remained up-beat since morning with industry body Assocham's statement that biometric cards have facilitated disbursement of as much as Rs 83,184 crore to beneficiaries of Direct Benefit Transfer (DBT) schemes without the notorious leakages of the past. Traders also took some encouragement with Finance Minister Arun Jaitley's statement that the Pradhan Mantri Jan Dhan Yojana and the related Jan Dhan- Aadhaar and Mobile number (JAM) trinity has the potential to link all Indians into one common financial, economic, and digital space. Adding to the optimism, Niti Aayog said that India has good prospects of achieving over 8 percent growth within 2-3 years and the chances of massive cut in the poverty rate in the upcoming decade are excellent. Meanwhile, a private poll enlightened that India's economic growth likely accelerated to 6.6 percent in the quarter just ended, but analysts are sounding increasingly worried that confusion over a new goods and services tax will dampen activity in coming months. However, markets lost some of their gains in second half of the trade to end off day's highs, as European shares fell in a broad sell-off as the euro strengthened after ECB chief Mario Draghi did not express concern about a strong currency in a closely watched speech. Asian markets closed mixed. Finally, the BSE Sensex gained 154.76 points or 0.49% to 31,750.82, while the CNX Nifty was up by 55.75 points or 0.57% to 9,912.80.


The US markets closed mostly higher on Monday, with the Dow industrials slipping lower and the S&P 500 and Nasdaq posting slight gains, as investors gauged the effect of Hurricane Harvey, which slammed into Texas over the weekend, flooding cities and forcing energy facilities to close. The storm, which was moving toward Louisiana, knocked out almost 15% of the nation's fuel-making capacity and further disruptions were anticipated. The coast of Texas hosts nearly 30% of US refining capacity, and Houston-area plants account for roughly half of that. The cautiousness prevailed amid reports that North Korea fired a ballistic missile that flew over Japanese airspace, reigniting geopolitical tensions that had cooled between North Korea and US allies in the Pacific Rim. On the economy front, an early look at US trade patterns in July points to a wider deficit. The advanced trade gap in goods - services are excluded - widened by nearly 1.8% to $65.1 billion in July. Both exports and imports declined, but exports dropped at a faster pace. The Nasdaq gained 17.38 points or 0.28 percent to 6,283.02, the S&P 500 edged higher by 1.19 points or 0.05 percent to 2,444.24, while the Dow Jones Industrial Average lost 5.27 points or 0.02 percent to 21,808.40.


Crude oil futures suffered sharp sell-off with the start of the new week, as Tropical Storm Harvey continued to disrupt refinery activity along the U.S. Gulf coast, adding to fears of an uptick in crude oil supplies. Weather Service reported that the breadth and intensity of the rainfall was beyond anything experienced before and said that catastrophic flooding is now underway and expected to continue for days. Flooding caused by the storm forced refiners in the Gulf of Mexico region to shutdown. Benchmark crude oil futures for October delivery ended down by $1.30 or 2.7 percent to $46.57 on the New York Mercantile Exchange. In London, Brent crude for October delivery ended lower by $1.44 at $51.23 a barrel on the ICE.


Indian rupee trimmed some of its early gains but still managed to end higher against the American currency on Monday, on continued dollar selling by banks and exporters. This is the second consecutive session when the rupee is traded higher against dollar. Traders remained optimistic with Niti Aayog's statement that India has good prospects of achieving over 8 percent growth within 2-3 years and the chances of massive cut in the poverty rate in the upcoming decade are excellent. Besides, firm domestic equities along with dollar's weakness against other currencies overseas too gave the rupee some relief. On the global front, dollar hit 16-month lows against a basket of currencies on Monday as tropical storm Harvey pummelled the heart of the US energy sector and raised concerns about the economy. Finally, the rupee ended at 63.91, 12 paise stronger from its previous close of 64.03 on Thursday.


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 4294.49 crore against gross selling of Rs 4851.47 crore, while in the debt segment, the gross purchase was of Rs 886.50 crore with gross sales of Rs 330.49 crore.


The US markets once again made a mixed closing in the last session after going through a lackluster day of trade, as traders were looking ahead to the release of key economic data in the coming days, with monthly jobs report in focus. The Asian markets have made a weak start and some of the indices are down by around a percent on heightened geopolitical tension after North Korea fired a ballistic missile over Japan, promising to fan simmering tensions with the US. The Indian markets after a steady day of trade ended with decent gains in the last session and the major benchmarks reclaimed their crucial levels. Today, the start is likely to be a bit soft and the markets may give up some of their last session gains, with geo-political worries weighing down the domestic sentiments too. Though, on the domestic front traders will be getting some relief with the Doklam military stand-off ending peacefully ahead of the BRICS summit, underscoring a diplomatic victory for India and the Modi government. Also, there are reports that the government is unlikely to change the financial year to January-December, though it is considering whether it could further advance the date of the presentation of the Budget by a fortnight or so. Meanwhile, Moody's Investors Services in its latest note has said that merging India's public sector banks will improve their ratings because it will provide efficiencies of scale and enhance the quality of corporate governance. There will be some cautiousness in the markets with a NITI Aayog report that has found that there is a huge gap between what the state governments have done to improve ease of doing business and what the enterprises know of these improvements. NITI Aayog has recommended reforming labour laws and a greater flexibility in their implementation to enhance ease of doing business. There will be some buzz in the telecom stocks as the Telecom Regulatory Authority of India (TRAI) has released a consultation paper on the next round of spectrum auctions seeking stakeholders' response. Some action can be seen in the iron stocks too, on report that stockpiles of iron ore in the country have swollen due to the imposition of 30 per cent export duty.


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  • Mahindra & Mahindra's subsidiary - Gromax Agri Equipment has launched new tractor brand 'Trakstar'.
  • Maruti Suzuki India's Alto has retained the top position in July with the sales of 26,009 units as against 19,844 units in the same month last year.
  • HCL Technologies has completed the acquisition of Urban Fulfillment Services, LLC with effect from August 24, 2017.
  • Tata Power Renewable Energy, 100% subsidiary of Tata Power, has increased its generation capacity by 460 percent in FY17 as compared to FY16.
News Analysis