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NSE Intra-day chart (03 October 2018)
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Market Commentary 04 October 2018
Markets to make pessimistic start amid weak Asian cues

Wednesday turned-out to be a horrendous day of trade for Indian equity benchmarks with frontline gauges ending below their crucial 36,000 (Sensex) and 10,900 (Nifty) levels. Markets started the session on pessimistic note as traders remained on sidelines ahead of the Reserve Bank of India's monetary policy review later this week and Services PMI data for the month of September to be released on October 4. Sentiments remained dampened with the government data showing that the growth of eight core sectors slowed to 4.2% in August, due to fall in output of crude oil, petroleum product and fertiliser. Besides, retail inflation for industrial workers rose to 5.61% in August from 2.52% in the year-ago month mainly due to rise in prices of food items and petroleum products. Weakness in rupee, which slipped below 73 per dollar mark for the first time, too dampened sentiments. The Indian currency dropped to a record low in opening deals on Wednesday as a sharp rise in global crude oil prices over the last two sessions weighed on sentiment for the local unit. Selling got intensified in last leg of trade and dragged markets to end near intraday lows, as market participants remained concerned with ICRA's latest report stating that credit quality pressure on investment grade entities has risen in the six months of April-September 2018, with an increase in the downward rating pressure on them. Anxiety also spread among traders after provisional estimate of the first phase of the 10th agricultural census showed that the average size of the Indian farmland shrank by over 6% between 2010-11 and 2015-16, with operational holding in the country dropping to 1.08 hectares from 1.15 hectares in 2010-11. Traders shrugged off report that the Commerce Ministry focusing on nine sectors, including pharma, food processing and textiles, to boost exports in the current fiscal. The ministry is targeting a minimum growth rate of 16% in exports this fiscal. Also, traders failed to get any sense of relief with report that the finance ministry expects the GST collections to cross Rs 1 lakh crore in November and December on account of festive season demand and the anti-evasion measures initiated by the revenue department. Finally, the BSE Sensex declined 550.51 points or 1.51% to 35,975.63, while the CNX Nifty was down by 150.05 points or 1.36% to 10,858.25.

The US markets ended higher on Wednesday even though market pared earlier gains. Besides, the Dow Jones Industrial Average settled at an all-time high. The gains were supported by upbeat economic data, but markets pared gains as the data also raised concerns about the outlook for interest rates. The payroll processor ADP released a report showing stronger than expected private sector job growth in the month of September. ADP said private sector employment jumped by 230,000 jobs in September after climbing by an upwardly revised 168,000 jobs in August. Street had expected employment to increase by about 185,000 jobs. Meanwhile, investors eyeing the Labor Department's monthly jobs report including both public and private sector jobs, which is scheduled to release on Friday. The report is expected to show employment climbed by about 188,000 jobs in September after jumping by 201,000 jobs in August. Besides, a separate report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in US service sector activity in September. The ISM said its non-manufacturing index climbed to 61.6 in September from 58.5 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to dip to 58.0. With the unexpected increase, the ISM said the non-manufacturing index reached its highest level since the inception of the composite index in 2008. Dow Jones Industrial Average jumped 54.45 points or 0.20 percent to 26,828.39, Nasdaq gained 25.54 points or 0.32 percent to 8,025.08 and the S&P 500 was up by 2.08 points or 0.07 percent to 2,925.51.


Crude oil futures ended higher to settle at near four-year highs on Wednesday amid reports about decline in oil exports from Iran ahead of the upcoming US sanctions and on expectations of short supply in the market next month. However, the US Energy Information Administration's (EIA) data showed that domestic crude supplies have surged by about 8 million barrels in the week ended September 28. That was the largest weekly climb so far in the year. Meanwhile, the American Petroleum Institute released a report showing that US crude oil stocks rose by 907,000 barrels last week. Benchmark crude oil futures for November surged $1.18 or 1.6 percent to settle at $76.41 a barrel on the New York Mercantile Exchange. December Brent crude gained $1.49 or 1.8 percent to settle at $86.29 a barrel on London's Intercontinental Exchanged.


Breaching the psychological 73 per dollar mark, Indian rupee ended at record low closing level against dollar on Wednesday, amid a surge in global crude prices. The rupee sentiments were hit with the government data showing that the growth of eight core sectors slowed to 4.2% in August, due to fall in output of crude oil, petroleum product and fertiliser. Besides, retail inflation for industrial workers rose to 5.61% in August from 2.52% in the year-ago month mainly due to rise in prices of food items and petroleum products. Cautions also crept ahead of the Reserve Bank of India's monetary policy review later this week and Services PMI data for the month of September to be released on October 4, 2018. Besides, a sharp sell-off in the domestic stock market coupled with dollar's strength against major global currencies overseas also put pressure on the rupee. On the global front, dollar stood near a one-month high against its peers on Wednesday as concerns as political wrangling over Italy's budget plan rattled market sentiment and weighed on the euro. Finally, the rupee ended at 73.34, 43 paise weaker from its previous close of 72.91 on Monday.


The FIIs as per Wednesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 5957.42 crore against gross selling of Rs 7565.47 crore, while in the debt segment, the gross purchase was of Rs 468.59 crore with gross sales of Rs 1648.77 crore. Besides, in the hybrid segment, the gross selling was of Rs 1.54 crore against no buying.


The US markets ended higher on Wednesday on encouraging reports on hiring and growth in the service sector. Asian markets were trading in red on Thursday as oil prices near four-year highs threatened to roil emerging economies while concerns over the persisting US-China trade war continued to weigh on investors' sentiment. Late hour sell-off mainly dragged the Indian markets lower to settle near intra-day low level on Wednesday after the rupee collapsed to a new life-time low amid surging crude oil prices and unabated foreign fund outflows coupled with Italy crisis. Today, the markets are likely to make gap-down opening following weakness in other Asian markets. Investors will be eyeing Services PMI data for the month of September to be out later in the day. There will be some cautiousness with Exporters' body Federation of Indian Export Organisations' (FIEO) statement that the growth of country's exports is likely to slow in the coming months owing to various domestic and global factors. It said Indian exports have always been influenced by the growth in global trade and therefore, the subdued global trade forecast of 3.9% in 2018 and 3.7% in 2019 will have adverse bearing on export. Besides, the Confederation of Indian Industry (CII) has submitted a dozen suggestions to the Prime Minister's Office, the finance minister and Reserve Bank of India (RBI) on curbing rupee volatility and controlling the current account deficit (CAD). CII has suggested incentives for foreign currency non-repatriable (FCNR) accounts, non-resident Indian (NRI) bonds and a special dollar window for oil companies, among the 12 measures to manage volatility in the rupee. Meanwhile, the government on Wednesday announced a 6% hike in wheat support price to Rs 1,840 per quintal and up to 21% increase in other rabi crops, a move that will give farmers Rs 62,635 crore additional income and help contain their simmering discontent over high input cost and low returns. There will be some buzz in the oil marketing companies (OMC) with report that the RBI allowed the OMCs to raise External Commercial Borrowings (ECB) from all recognised lenders under the automatic route. Also, there will be some reaction in public sector baking stocks with report that the government will release the second tranche of capital infusion into the public sector banks (PSBs) under its recapitalisation programme.


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  • Hero MotoCorp has sold 769,138 units of motorcycles and scooters in September 2018 its highest-ever sales in any single month. 
  • Dr. Reddy's Laboratories' wholly owned subsidiary -- Promius Pharma, LLC, has sold its rights of Cloderm Cream, 0.1 % and its authorized generic to EPI Health, LLC, an affiliate of EPI Group, LLC. 
  • Infosys has entered into three-year collaboration with Cornell University to reshape the workforce driving digital transformation by advancing employee education and research. 
  • Maruti Suzuki India will proactively and voluntarily undertake a recall for Super Carry vehicles to inspect for a possible defect in fuel pump assembly.
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