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NSE Intra-day chart (30 October 2017)
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Market Commentary 31 October 2017
Markets to make a soft-to-cautious start on sluggish global cues

Continuing their record run one after another, Indian equity benchmarks once again settled at new record closing high levels on Monday, surpassing their crucial 10,350 (Nifty) and 33,200 (Sensex) bastions. After an optimistic start, markets traded with traction but in particular range to end near all time high levels. Sentiments remained up-beat since beginning with traders taking encouragement with the private report that the government's recapitalization plan for public sector banks is likely to propel credit growth by up to 700 basis points to 15% and as consequence push up GDP numbers to 7% in the next fiscal. The report highlighted that the industry is likely to see a 7% growth in 2018-19 from 5% in the current fiscal. Services are projected to grow at 7.3% in the current fiscal and rise to 7.5% in the succeeding year. Also, the street reacted positively to the meeting outcome of the ministerial panel working to make GST composition scheme more attractive, which suggested slashing tax rate to 1% for manufacturers and restaurants, while easier norms for traders opting for it. Meanwhile, FM Arun Jaitley has enlightened that individual tax base is growing with India having the lowest direct tax slab in the world, digital transactions are rising, and the new insolvency law will yield positive results. Some support also came with report that India expecting a big jump in the World Bank's ease of doing business ranking that will be released soon, thanks to multiple reforms initiated by the government beginning to show results. Ranked at 130 in the last reckoning, the government has set itself a target of breaking into the top 50. Reports that Reserve Bank is likely to cut rates at its December 6 policy review meet as retail inflation remains muted and the October number is expected to be about 3.3 percent, too aided sentiments. Adding to the optimism, foreign investors have pumped in close to $3 billion in the Indian capital markets so far this month due to high nominal and real yields and stable macroeconomic conditions. Finally, the BSE Sensex surged 108.94 points or 0.33% to 33,266.16, while the CNX Nifty was up by 40.60 points or 0.39% to 10363.65.

The US markets ended marginally in red on Monday with traders showing reluctance to make more significant moves ahead of the release of some key economic data and earnings news in the coming days. The monthly jobs report due to be released on Friday and reports on consumer confidence, manufacturing and service sector activity, and labor productivity and costs are due in the week. Traders were also concerned with a report indicating House tax writers are discussing a gradual phase-in for the corporate tax-rate cut. On the economy front the Commerce Department released a report showing personal income rose in line with estimates, while personal spending jumped more than expected in the month of September. Personal income climbed by 0.4 percent in September and personal spending surged up by 1.0 percent in September following a 0.1 percent uptick in August. The Dow Jones Industrial Average declined by 85.45 points or 0.4 percent to 23,348.74, the S&P 500 edged lower by 8.24 points or 0.3 percent to 2,572.83 and the Nasdaq was lower by 2.30 points or 0.09 percent to 6,698.96.

Crude oil futures extended their gains to the new week on speculation that Opec will agree to extend output cuts beyond March. Traders even overlooked the concerns over an uptick in Iraqi exports and continued their march higher, rising to an eight-month high amid bullish talk from Opec and non-Opec members on output-cut agreement. OPEC Secretary General Mohammad Barkindo said Russian-Saudi backing for an extension cleared the fog ahead of the group's meeting in Vienna on Nov. 30. Meanwhile, Iraq's southern ports ramp up export capacity by 900,000 barrels per day (bpd) to 4.6 million bpd. Benchmark crude oil futures for December delivery ended higher by $0.25 or 0.5 percent at $54.15 a barrel on the New York Mercantile Exchange. Brent crude for December delivery added 0.45 percent to $60.59 a barrel on the ICE.

Indian rupee ended higher against the dollar on Monday, with the American currency coming under heavy selling by banks and exporters. The domestic currency looked strong from the very beginning and was supported by the gains in the local equity markets. Sentiment got up-beat with the private report stating that the Reserve Bank is likely to cut rates at its December 6 policy review meet as retail inflation remains muted and the October number is expected to be about 3.3 percent. Some support also came with the report that foreign investors have pumped in close to $3 billion in the Indian capital markets so far this month due to high nominal and real yields and stable macroeconomic conditions. Besides, the dollar's weakness against the yen and other currencies overseas following the ECB move triggered the rise in the local unit. Finally, the rupee ended at 64.85, 20 paise stronger from its previous close of 65.05 on Friday.

The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 6124.41 crore against gross selling of Rs 5931.79 crore, while in the debt segment, the gross purchase was of Rs 2102.38 crore with gross sales of Rs 1582.87 crore.

The US markets ended modestly lower in the last session and the tech-heavy Nasdaq after reaching a record intraday high in early trading pulled back to end the day slightly lower, the weakness was on reports that House tax writers are discussing a gradual phase-in for the corporate tax-rate cut. The Asian markets after a modestly positive start have turned lower with investors assessing developments on US tax reform , Japanese market was down ahead of key monetary policy decision. China's manufacturing purchasing managers index fell to 51.6 in Oct. Indian shares added gains to close at fresh record highs in last session, on some positive earnings updates and expectations that the RBI will cut interest rates in December. Today, the start is likely to be cautious on sluggish global cues, also there will be some cautiousness with a report from domestic rating agency Care Ratings, which said that employment generation has not kept pace with GDP expansion and termed it as a "major concern". Meanwhile, hoping to make compliance easier for businesses under the Goods and Services Tax regime, the government has extended the last dates of filing GSTR-2 and GSTR-3. The last date for filing of GSTR-2 for the month of July, 2017 is 31st October, 2017, while the last date for filing of GSTR-3 for the month of July, 2017 stands extended to 11th December, 2017. Traders will also get some support with few foreign investment banks, who have started revising upwards their targets for the benchmark indices on the back of bank recapitalisation programme, infrastructure push and continued inflow of domestic savings into equities and said that best is yet to come for Sensex and Nifty. Also, India is expecting a significant improvement in ranking in the World Bank's ease of doing business index on the back of several steps taken by the government like bankruptcy law and host of other reforms. There will be some buzz from the primary market too with Mahindra Logistics Ltd, the logistics arm of automobile maker Mahindra and Mahindra will open its Rs 829.36 crore IPO.

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  • Tata Motors' subsidiary -- JLR has launched the fifth generation Land Rover Discovery in a seven-seater format at a price point ranging from Rs 71.38 lakh to Rs 82 lakh.
  • Axis Bank backed online platform for financing MSMEs has clocked 3,000 invoices worth more than Rs 100 crore within first 100 days of operations.
  • Lupin has reported 31.29% fall in its net profit at Rs 455.01 crore for the Q2FY18 as compared to Rs 662.19 crore for Q2FY17.
  • Bharti Airtel has partnered with Celkon to offer a low cost bundled 4G smartphone at an effective price of Rs 1,349. 

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