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NSE Intra-day chart (30 October 2018)
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Market Commentary 31 October 2018
Markets to make optimistic start on positive global cues


Indian equity benchmarks wrapped up a volatile session on pessimistic note on Tuesday, with losses of over half a percent. The markets made a cautious opening of the day to trade choppy, impacted by the Reserve Bank of India's (RBI) latest data report stating that investment of Indian companies in their overseas ventures declined by 47.08% to $1.54 billion in September 2018, as compared to $2.91 billion invested in their joint ventures (JVs) and wholly-owned subsidiaries (WoS) abroad during September 2017. Domestic sentiments remained under pressure, as with private report indicated that high oil prices are hurting consumers and could also have adverse implications for producers. Major emerging Asian economies such as India and Indonesia have been hit hard this year by rising crude oil prices. Adding more worries among market participants, Crisil's latest report stated that depreciating rupee puts nearly half of the solar power capacities under implementation worth around Rs 28,000 crore at viability risk. The report also noted that import of solar modules has got costlier due to rupee fall and increased the cost of setting up solar plants. In the last hours of the trade, the markets weaken further, as Finance Minister Arun Jaitley criticised the Reserve Bank of India for failing to check indiscriminate lending during 2008 and 2014 that has led to the present bad loan or NPA crisis in the banking industry. The traders overlooked Economic Affairs Secretary Subhash Chandra Garg's statement that the government is trying to find ways to ensure stability of FPI fund flows into the financial markets. He also said developments like bond yield cycle, taxation reforms, in the US have not hurt Foreign Direct Investment (FDI) flow into the country. The street also failed to take any sense of relief with Commerce and Industry Minister Suresh Prabhu's statement that the government will work on promoting the growth of the education sector to help increase the share of overall service sector in the country's economy. Meanwhile, India and Japan signed a pact to raise the scope of a bilateral currency swap arrangement to a record $75 billion, aimed at bringing in greater stability in the foreign exchange and capital markets, amid a slide in the rupee in recent months. Finally, the BSE Sensex lost 176.27 points or 0.52% to 33,891.13, while the CNX Nifty was down by 52.45 points or 0.51% to 10,198.40.


Snapping two-day losing streak, the US markets ended significantly higher on Tuesday as President Donald Trump signaled that the US is ready to reach a deal to ease trade tensions with China, giving the market some much-needed relief. However, trading was volatile with the indexes choppy partly on the back of tariff worries amid fears about global growth and peak earnings. President Donald Trump's prediction the US will reach a great deal with China on trade offset some of the concerns, although the president also warned of more tariffs if a deal is not possible. The comments from Trump came after a private report said the US is preparing to announce tariffs on all remaining Chinese imports if next month's talks between Trump and Chinese President Xi Jinping fail to ease the trade war. Trump and Xi are expected to meet on the sidelines of a Group of 20 summit in Buenos Aires, Argentina, beginning November 30. Adding optimism, the Conference Board showed a continued increase in consumer confidence in the month of September. The Conference Board said its consumer confidence index rose to 137.9 in October from a downwardly revised 135.3 in September. Street had expected the consumer confidence index to drop to 136.3 from the 138.4 originally reported for the previous month. With the increase, the consumer confidence index reached its highest level since hitting 142.5 in September of 2000. Dow Jones Industrial Average surged 431.72 points or 1.77 percent to 24,874.64, Nasdaq gained 111.36 points or 1.58 percent to 7,161.65 and S&P 500 was up by 41.38 points or 1.57 percent to 2,682.63.


Crude oil futures extend losses for second straight session on Tuesday and settled over 2-month low, as demand growth concerns continued to weigh on the commodity. With global oil production rising and the market moving towards a situation where supply may well overrun demand, traders are wary of building up positions in crude futures. Meanwhile, the US Energy Information Administration is slated to release its inventory data on Wednesday. It is widely expected that US crude stockpiles may have risen in the week ended October 26, increasing for a sixth successive week. Benchmark crude oil futures for December lost 86 cents or 1.3 percent to settle at $66.18 a barrel on the New York Mercantile Exchange. December Brent crude declined $1.43 or 1.9 percent to settle at $75.91 a barrel on London's Intercontinental Exchanged.


Indian rupee ended significantly weaker against the Greenback on Tuesday, following fresh demand for the US currency from banks and importers to meet the month end dollar demand. Sentiments weakened with private report indicating that high oil prices are hurting consumers and could also have adverse implications for producers. Major emerging Asian economies such as India and Indonesia have been hit hard this year by rising crude oil prices. Besides, a weak trend at Dalal Street coupled with US dollar's gain against other currencies overseas weighed on the local unit. On the global front, dollar remained firm against its rivals, supported by a safe haven bid as rising trade tensions and fears of a slowdown in global economic growth weighed on investors' appetite for risk assets. Finally, the rupee ended at 73.68, 23 paise weaker from its previous close of 73.45 on Monday.


The FIIs as per Tuesday'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 4447.50 crore against gross selling of Rs 6253.02 crore, while in the debt segment, the gross purchase was of Rs 1228.89 crore with gross sales of Rs 432.96 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.14 crore against gross selling of Rs 0.23 crore.


The US markets ended significantly higher on Tuesday, helped by strong gains for chipand transport stocks as investors took advantage of cheaper prices following a steep recent pullback for equities. Asian markets were trading mostly in green on Wednesday, thanks to a rebound on Wall Street. Indian markets witnessed a volatile trading session with extreme swings between positive and negative zones and settled in red territory on Tuesday amid lingering US-China trade war concerns and heavy selling by foreign portfolio investors. Today, the markets are likely to make positive start following strong global cues. Traders will be getting some encouragement with a private report stating that India's long-term growth story remains robust despite global headwinds as well as rupee depreciation and high oil prices. It aaded that strain on India's external balance sheet has increased due to slide in forex reserve, outflows in foreign investment, increased current account deficit (CAD), rupee depreciation and high global crude oil prices. Traders may take note of report that Commerce and Industry Minister Suresh Prabhu hinted at improvement in India's ranking in the World Bank's ease of doing business report, to be released on Wednesday. India jumped 30 places to rank 100th among 190 nations in the last year's World Bank's ease of doing business index. However, there may be some cautiousness with Reserve Bank of India's report showing that India Inc's foreign borrowing more than halved to $1.71 billion in September. Meanwhile, the high level the Financial Stability and Development Council (FSDC) meeting chaired by Finance Minister Arun Jaitley discussed liquidity issues being faced by the non-banking financial companies. There will be some buzz in power sector stocks with report that the government is looking to execute at least two mergers among central public sector enterprises (CPSEs) in the power sector to step up the disinvestment process and meet its target. Also, there will be some reaction in rubber industry related stocks with report that the projected growth in the rubber consumption which is a corollary to overall economic development of the country necessitates the need to expand rubber production though the current prolonged phase of natural rubber price crash has impacted the growers deeply. There will be lots of earnings reaction based on the performance of the companies.


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  • Tech Mahindra and Rakuten Mobile Network have entered into an agreement to set up 5G and 4G network labs in Tokyo and Bengaluru. 
  • BPCL has reported a fall of 48.30% in its net profit at Rs 1,218.71 crore for Q2FY19 as compared to Rs 2,357.40 crore for Q2FY18.
  •  Tata Steel has inaugurated Jubilee Park built by it at Chaibasa, as part of its commitment towards community development. 
  • NTPC has entered into a contract with the Indian Railways for transportation of coal from mines to all its plants through fiscal 2020.
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