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NSE Intra-day chart (28 July 2017)
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Market Commentary 31 July 2017
Markets to make a mildly green start of the crucial week

Recovery in last leg of trade helped Indian equity benchmarks to pare most of their early losses, but was not enough to pull indices into green terrain on Friday. Markets went home with modest cut, as traders opted to book profit ahead of Reserve Bank of India's two-day monetary policy meeting, which is set to begin next week on August 1. Domestic bourses made a weak start to the new F&O series with both Nifty and Sensex declining below their crucial 10,000 and 32,300 levels respectively. Traders remained concerned with banking major ICICI reporting an eight percent fall in first quarter profit from a year earlier to Rs 2,049 crore, though the bank said it was optimistic about containing its bad loans after the three months to June saw the smallest rise in soured assets for seven quarters. Markets extended sell-off in afternoon trade and even went to test crucial 9,950 (Nifty) and 32,100 (Sensex) levels, as some anxiety spread among the investors with Niti Aayog chief Amitabh Kant's statement that the government needs to adopt the model of build, operate and transfer (BOT) for infrastructure projects. These projects then should be given to private companies as the government is incapable of handling the maintenance and operations of such projects. However, the key gauges got some support near those intraday low levels as they trim most of their losses from thereon and ended above their crucial 10,000 (Nifty) and 32,300 (Sensex) levels, as investors continued hunt for fundamentally strong stocks. Traders got some support with report from the prestigious Massachusetts Institute of Technology (MIT), which said that monsoon has strengthened over north central India in the last 15 years, indicating a reversal in the general perception that the region has dried up in over a decade. Traders also get some solace after Standard & Poor's (S&P) ratings in its latest report said that the credit quality of top corporates which is on the path of recovery is likely to improve over the next two years and will lead to revenue growth. Finally, the BSE Sensex declined 73.42 points or 0.23% to 32,309.88, while the CNX Nifty was down by 6.05 points or 0.06% to 10,014.50.


The US markets closed mostly lower on Friday, with the S&P 500 and Nasdaq both finishing slightly lower for week, while the Dow industrials finished at a record. The pullback in the broader stock market came amid a few blemishes in relatively strong earnings season showed that investors who are skittish about high valuations are taking money off the table while those who are more confident of earnings growth are supporting levels. On the economy front, the US grew at a 2.6% annual pace in second quarter, rebounding from soft patch at the start of the year. Consumer spending, the main engine of the economy led the way with a 2.8% increase. Business investment in equipment rose 8.2%, while outlays on structures advanced 4.9%. In a bit of a surprise, the value of inventories fell slightly to mark the second decline in a row. Investment in new housing also sank 6.8%. Exports rose 4.1% and imports edged up 2.1%. Inflation as measured by the PCE price index increased at a 0.3% annual rate. First-quarter GDP was revised lower to 1.2%. Separately, the cost of employing the average US worker rose 0.5% in the second quarter but showed little acceleration despite the tightest labor market in years. The Nasdaq lost 7.51 points or 0.12 percent to 6,374.68, S&P 500 edged lower by 3.32 points or 0.13 percent to 2,472.10, while the Dow Jones Industrial Average added 33.76 points or 0.15 percent to 21,830.31.


Crude oil futures continuing their upmove posted biggest weekly gain this year, amid signs the global supply glut could be over within a year, as data during the week eased concerns about surplus supplies, after Saudi Arabia pledged to lower exports while U.S. crude supplies fell more than expected. Also supporting a rise in crude prices was the possibility of major disruptions to crude supplies from Venezuela, which faces a national vote Sunday to elect a constituent assembly whose job will be to redraft its constitution. Traders even overlooked Oilfield services firm Baker Hughes report that its weekly count of oil rigs operating in the United States ticked up by two rigs to a total of 766. Benchmark crude oil futures for September delivery gained $0.67 or 1.4 percent to $49.71 on the New York Mercantile Exchange. In London, Brent crude for September delivery ended higher by 1.02 percent at $52.51 a barrel on the ICE.


Indian rupee ended marginally weaker against dollar on Friday, due to month-end dollar demand from importers and banks. Also, a weak domestic equity market weighed on the rupee. Traders maintained cautious approach ahead of the Reserve Bank of India's two-day monetary policy meeting, which is set to begin next week on Tuesday, while the outcome is expected on Wednesday. On the global front, dollar dipped against its major peers on Friday ahead of an update on the broadest measure of the US economy-a GDP report that could help shape the Federal Reserve's so far slow-moving approach to interest rates. Finally, the rupee ended at 64.15, 4 paise weaker from its previous close of 64.11 on Thursday.


The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 9743.08 crore against gross selling of Rs 7303.92 crore, while in the debt segment, the gross purchase was of Rs 1748.08 crore with gross sales of Rs 973.82 crore.


The US markets made a mixed closing in a negative reaction to the latest batch of earnings news. Concerns about the latest developments in Washington also weighed on the markets after Republicans failed in their latest attempt to repeal Obamacare. The Asian markets have made mostly a positive start with gain in raw-material producers after a surge in commodity prices bolstered optimism the global economy can gather momentum. The Indian markets despite some late hour recovery ended marginally lower in the last session. Today, the start of the crucial data heavy week is likely to be flat-to-green with the Reserve Bank of India (RBI) reviewing its monetary policy on August 2, with most economists expecting a 25 bps rate cut on the back of falling retail inflation. Meanwhile, ahead of the next monetary policy review, Reserve Bank Governor Urjit Patel on Friday called on Finance Minister Arun Jaitley and is believed to have discussed various macro-economic issues. Traders will be getting some support with Finance Minister Arun Jaitley's statement, who underlining the government's push on reforms has said that in the last three years, the prime minister has been forcing one or two important changes. India has to become a country where it is easy to do business and the businesses are done in the most ethical way. The government estimates that total registrations, old and new, under the goods and services tax (GST) will add up to between 90 lakh and one crore by the end of the financial year, substantially increasing the tax base and ushering in greater compliance. There will be buzz in oil stocks, as the union minister Dharmendra Pradhan has said that centre is planning to set up petrochemical clusters in eastern, western and southern India, to spur growth of the sector amid increasing demand. There will be lots of important earnings announcements that will keep the markets in action.


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Yes Bank






  • ONGC has received the government approval for acquiring the Gujarat State Petroleum Corporation's entire 80% holding in a KG basin gas block for Rs 7,738 crore.
  • ITC has reported a rise of 7.37% in its net profit at Rs 2560.50 crore for the quarter ended June 30, 2017 as compared to Rs 2384.67 crore for the same quarter in the previous year.
  • Sun Pharmaceutical Industries has raised its shareholding in Zenotech Laboratories from 46.85% of pre rights issue capital to 57.56% of the post rights issue capital.
  • ICICI Bank has reported 3.53% rise in its consolidated net profit at Rs 2604.73 crore for the quarter ended June 30, 2017 as compared to Rs 2515.85 crore for the corresponding quarter in the FY17.
News Analysis