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NSE Intra-day chart (30 July 2019)
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Market Commentary 31 July 2019
Markets to make a negative start amid weak global cues


Tuesday turned out to be yet another disappointing day for Indian equity markets, as both the larger peers, Sensex and Nifty, saw huge losses of 289 and 103 points, respectively. After a firm start, markets remained in green terrain for the most part of the session, aided with State Bank of India's (SBI) Ecowrap report stating that India has benefited from US-China trade war by exporting more items to US and China. Adding some comfort, Finance Minister Nirmala Sitharaman called for a significant reduction in the central bank's policy rates and said the government did not intend to review the budget proposal for overseas sovereign borrowings. However, during noon deals, volatility hit the markets which had dragged the indices to near day's low points. Sentiments got hit, amid Moody's report that even as more and more crippled banks come out of the dud asset tunnel, the heightening growth slowdown & the lingering crisis at non-banking lenders pose fresh challenges to their asset quality. Some worries also came with CARE Ratings' report that India is staring at a rise in food inflation soon, as weak monsoon rainfall hits the country's food output. It said the retail inflation in the food components for June 2019 has risen to 13-months high & weak progress going ahead could push food inflation higher. Finally, the BSE Sensex fell 289.13 points or 0.77% to 37,397.24, while the CNX Nifty was down by 103.80 points or 0.93% to 11,085.40.


The US markets ended in red on Tuesday on concerns about US-China trade talks after President Donald Trump claimed there are no signs that China is following through on plans to purchase US agricultural products and suggested the Chinese are hoping to wait out the US presidential election to get a better deal. He added that is the problem with China, they just don't come through. My team is negotiating with them now, but they always change the deal in the end to their benefit. China and the US agreed to restart trade talks late last month after they fell through in May. The two countries have been engaged in a trade war since last year. In that time, they have slapped tariffs on billions of dollars worth of each other's goods. Besides, traders also looked to the start of a Federal Reserve monetary policy meeting. Market expectations point to a quarter-point rate cut. On the economic front, after reporting a sharp pullback in US consumer confidence in the previous month, the Conference Board released a report showing confidence rebounded by much more than anticipated in the month of July. The Conference Board said its consumer confidence index surged up to 135.7 in July after tumbling to a revised 124.3 in June. Street had expected the index to climb to 125.0 from the 121.5 originally reported for the previous month. Meanwhile, a report released by the Commerce Department showed personal income and spending in the US both rose in line with street estimates in the month of June. The Commerce Department said personal income climbed by 0.4% in June, matching the downwardly revised increase in May. Dow Jones Industrial Average dropped 23.33 points or 0.09 percent to 27198.02, Nasdaq declined 19.72 points or 0.24 percent to 8273.61 and S&P 500 was down by 7.79 points or 0.26 percent to 3013.18.


Crude oil futures ended higher with gains of over one percent on Tuesday as traders bided up crude a day ahead of the conclusion of a Federal Reserve policy meeting that is expected to deliver a quarter percentage point interest rate cut. Meanwhile, the resumption of US-China trade talks was also viewed as a positive. Besides, the Energy Information Administration's official tally of oil and product inventories is due Wednesday. US inventories have fallen for six straight weeks. Benchmark crude oil futures for September rose $1.18 or 2.1 percent to settle at $58.05 a barrel on the New York Mercantile Exchange. October Brent surged $1.01 or 1.6 percent to settle at $64.63 a barrel on London's Intercontinental Exchange.


Indian rupee ended lower against US dollar on Tuesday on account of sustained demand for dollar from banks and importers. Sentiments remain dented with CARE Ratings' report that India is staring at a rise in food inflation soon, as weak monsoon rainfall hits the country's food output. Besides, subdued sentiments in domestic equity markets weighed on the domestic currency and strengthening of the US dollar vis-a-vis other currencies overseas also kept pressure on the Indian rupee. However downside remain capped with State Bank of India's (SBI) Ecowrap report stating that India has benefited from US-China trade war by exporting more items to US and China. On the global front, euro hovered on Tuesday around the 26-month low it reached last week against the dollar as investors awaited to see whether the Federal Reserve would signal the start of an interest rate-cutting cycle. Finally, the rupee ended at 68.85, 10 paise weaker from its previous close of 68.75 on Tuesday.


The FIIs as per Tuesday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 3566.95 crore against gross selling of Rs 3940.88 crore,while in the debt segment, the gross purchase was of Rs 1768.80 crore with gross sales of Rs 1889.21 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.30 crore against gross selling of Rs 2.28 crore.


The US markets settled lower on Tuesday after President Donald Trump renewed his attacks on China, decreasing hope the two largest world economies will reach a trade deal. Asian markets are trading in red on Wednesday as investors mulled pessimistic signs for US-China trade talks alongside a mixed set of corporate earnings ahead of the Federal Reserve's long-awaited interest-rate cut. Indian markets wiped out all of their early gains and ended lower with cut of over half a percent mainly due to late hour sell-off amid selling pressure in banking, auto, metal and financial services counters. Today, the markets are likely to make a pessimistic start tracking weak global cues. There will be some cautiousness with a private report that despite the policymakers' efforts to revive the sagging growth momentum, the economy is set to print in a 5.7 percent uptick in the June quarter and is likely to bottom out from there. It noted that India presents a picture of short-term despair and medium term hope. Traders will be also concerned with a private survey report stating that reflecting subdued sentiments, India has been ranked fourth globally in terms of business optimism, as only 64 per cent of corporates are optimistic about the country's economic growth over the next 12 months. Traders may take note of report that in its first report on GST, the Comptroller and Auditor General of India (CAG) has pointed out that the new tax regime has not achieved its full potential in terms of simplification even after two years of roll-out. The report also highlighted various other deficiencies and loopholes in the tax regime. The CAG has noted that the growth of indirect taxes slowed down to 5.8 percent in 2017-2018 as compared to 21.33 percent decline during 2016-2017. However, some respite may come later in the day with the government data showing that India received the highest-ever FDI inflow of $64.37 billion during the fiscal ended March 2019. According to the Annual Report 2018-19 of the Department for Promotion of Industry and Internal Trade (DPIIT), foreign direct investments (FDI) worth $286 billion were received in the country in past five years. There will be some buzz in the non-banking financial companies (NBFCs) stocks after the Reserve Bank of India (RBI) relaxed the end-use stipulations under external commercial borrowings framework for corporates and NBFCs. There will be some buzz in the power stocks with CRISIL's report that the new payment security mechanism will benefit power-generation companies (gencos). It said that these companies are expected to get payments within the expiry of the official credit period in the region of 45-60 days.


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  • Dr. Reddy's Laboratories has launched Pregabalin Capsules a therapeutic equivalent generic version of Lyrica (pregabalin) capsules approved by the USFDA. 
  • Tata Consultancy Services has launched an undergraduate programme in computer science with Cognitive Systems. 
  • Power Grid Corporation of India is looking for shareholders' approval to raise up to Rs 10,000 crore through the issuance of bonds on a private placement basis. 
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