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NSE Intra-day chart (10 April 2018)
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Market Commentary 11 April 2018
Markets likely to make positive start tracking firm global cues

 

Extending winning streak for fourth straight session, Indian equity benchmarks ended the Tuesday's trade in green terrain with frontline gauges recapturing their crucial 10,400 (Nifty) and 33,800 (Sensex) levels. Markets traded in green throughout the session but in a tight band. Sentiments remained up-beat since beginning, as traders bet for improved corporate earnings and acceleration in economic growth, with readings on industrial production and retail inflation due on Thursday. Traders took some encouragement with Commerce and Industry Minister Suresh Prabhu's statement that India can benefit from the ongoing challenges in global trade provided it plays its cards well. He said, We are passing through a challenging but an opportune time. If we play our cards properly, and that is what we are trying to do we can actually benefit from it by creating an opportunity around the issues that are happening globally and we have no choice but to respond in a positive manner. Investors took note that in a major boost to infrastructure development in the north-east, NITI Aayog will soon hold a high-level meeting to chalk out strategies for improving road, rail and air connectivity in the regions besides focusing on improving hydel power production and organics farming in the states. Traders took some support with private report showing that FPI investment limits in central government securities for general and long term investors have been increased by Rs 59,200 crore or over $9 billion to a total of Rs 3.15 lakh crore till the end of FY19. Some support also came after Prime Minister Narendra Modi gave a 100-day deadline to the heads of central public sector enterprises (CPSEs) to come out with a roadmap with measurable targets for strengthening state-owned companies and promoting development activities. Modi also suggested that their CSR spend should be focused largely on one specific theme each year. Finally, the BSE Sensex surged 91.71 points or 0.27% to 33,880.25, while the CNX Nifty was up by 22.90 points or 0.22% to 10,402.25.

 

The US markets closed higher on Tuesday, thanks to a less-aggressive stance on trade taken by Chinese President Xi Jinping. Xi's conciliatory comments on tariffs helped to ease concerns about an escalating conflict between the world's two largest economies, sending prices of risky assets such as global equities and commodities higher. He also talked about a cut in tariffs on car imports and an improvement in protection of intellectual property, among other measures. While many of the measures had been previously touted by Xi, investors cheered the lack of any escalation in rhetoric. On the economy front, the index of small-business optimism from the National Federation of Independent Businesses fell to 104.7 in March. The confidence index roared higher early in the year, and despite a decline of nearly three points, remains among the highest in survey history. The fewest survey respondents since 1982 said taxes were their number one business problem. Meanwhile, US wholesale prices accelerated in March to show a 0.3% increase despite lower energy costs, suggesting inflationary pressures in the US have become more widespread. The 12-month rate of wholesale inflation, meanwhile, rose to 3% for the first time since November and only the second time since the government reformulated its PPI index in 2013. The Dow Jones Industrial Average added 428.9 points or 1.79 percent to 24,408.00, the Nasdaq gained 143.957 points or 2.07 percent to 7,094.30, while the S&P 500 was up by 43.71 points or 1.67 percent to 2,656.87.

 

Crude oil futures edged sharply higher on Tuesday with Brent oil futures settling at their highest in more than three years as tensions linked to Syria raised the potential for disruptions to Middle East crude output. The oil prices up-move was also supported by report that Chinese and U.S. officials have softened their rhetoric over their trade spat, easing worries over the potential for a slowdown in demand for oil. Meanwhile, the EIA's weekly petroleum supply data are due Wednesday and the street is expecting the agency to report a weekly rise of 100,000 barrels in crude stockpiles, along with declines of 2 million barrels in gasoline and 1.2 million barrels in distillate supplies. Benchmark crude oil futures for May delivery gained $2.09 or 3.3 percent to settle at $65.51 a barrel on the New York Mercantile Exchange. June Brent crude jumped $2.39 or 3.5 percent to settle at $71.04 a barrel on London's Intercontinental Exchange.

 

Indian rupee pared some of early gains to end marginally higher against dollar on Tuesday, due to some dollar demand from importers and corporates. Traders took some support with Commerce and Industry Minister Suresh Prabhu expressing hopes that India can benefit from the ongoing challenges in global trade provided it makes the right moves. The Minister added that the Indian government is taking steps to boost exports, industrial growth and manufacturing activities. Besides, positive trend in equity market too supported the rupee. However, gains were capped as investors remained cautious ahead of key economic data i.e. February IIP and March CPI data, scheduled to be released on April 12. On the global front, dollar rose against the yen on Tuesday after Chinese President Xi Jinping's promise to cut import tariffs eased concerns about a trade conflict and revived risk appetite.Finally, the rupee ended at 64.99, 4 paise stronger from its previous close of 65.03 on Monday.

 

The FIIs as per Tuesday's data were net sellers in equity segment, while they were net buyers in debt segment, in the equity segment, the gross buying was of Rs 4492.70 crore against gross selling of Rs 5777.21 crore, while in debt segment, the gross purchase was of Rs 3267.92 crore with gross sales of Rs 2511.95 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.26 crore against gross selling of Rs 1.98 crore.

 

The U.S. stocks edged higher on Tuesday as traders reacted positively to comments from Chinese Xi Jinping regarding the trade dispute between China and the U.S. Xi promised to lower import tariffs on products including cars and take other steps to further open the world's second-largest economy. Asian markets are trading mostly in green tracking strength overnight in the U.S. and Europe as Chinese President Xi Jinping's comments eased concerns about a trade war and calmed the market. Indian shares rose for a fourth consecutive session on Tuesday as global cues remained well supported on increased hopes that a full-blown war between the U.S. and China could be averted. Today, the markets are likely to make positive start tracking firm global cues. Traders will take some encouragement with World Economic Forum's (WEF) statement that India can play a pivotal role in shaping the global fourth Industrial revolution as over half of its population is under the age of 27. The WEF has already partnered with the Indian government to set up the Centre for the Fourth Industrial Revolution India in Mumbai. Some support will also come with report that the Reserve Bank continued to remain a net purchaser of the US currency in February after it had bought $1.665 billion from the spot market. During the month, the central bank bought $3.320 billion, while it sold $1.655 billion in the spot market. Meanwhile, the government is considering converting GST Network- which is handling the IT infrastructure of the new indirect tax regime - into a state-owned company. Currently, private financial institutions are the majority owners in GSTN with 51 percent stake, while the centre and states together hold 49 percent. Traders will remain concern with report that Fitch Ratings downgraded the viability rating of Punjab National Bank (PNB) to BB- from BB, saying that fraudulent transactions will affect the bank's financials, including its earnings and core capitalization. 


Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

10,402.25

10,380.88

10,424.23

BSE Sensex

33,880.25

33,812.37

33,949.05

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support (Rs)

Resistance (Rs)

(in Lacs)

ICICI Bank

447.42

288.80

280.42

295.82

Hindalco

275.19

230.00

228.05

232.40

Axis Bank

216.89

546.15

528.47

556.77

SBI

212.01

263.30

259.53

266.03

ITC

146.83

266.70

264.97

268.57

 

  • SBI's JV - Neev Fund has made an undisclosed investment in Leap India Food and Logistics to develop agri-silos in states with low levels of capital investments. 
  • Yes Bank is planning to borrow/raise funds in Indian/foreign currency by issue of debt securities including but not limited to non-convertible debentures, bonds, MTN. 
  • Dr. Reddy's Laboratories has received the EIR from the USFDA for its API Cuernavaca plant in Mexico. 
  • Bharti Airtel has launched new Rs 499 prepaid plan which comes with local and STD calls, free roaming, 100 SMS every day, along with the 2GB daily FUP limit.
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