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NSE Intra-day chart (19 September 2018)
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Market Commentary 21 September 2018
Markets likely to make positive start amid firm global cues


Indian equity benchmarks extended their southward journey for third straight session with frontline gauges ending below their crucial 11,250 (Nifty) and 37,200 (Sensex) levels. Markets started the session on an optimistic note with report that the finance ministry on September 18 asked ministries to shortlist commodities and goods for import curbs by increasing customs duty, to ease the pressure on the rupee and keep the widening Current Account Deficit (CAD) on check. Besides, Finance Minister Arun Jaitley made a case for blending subsidy with investment to augment farm sector growth and make it sustainable and self-sufficient. Some support came with a report stating that Indian farmers and US manufacturers of medical devices could be among the main winners in a trade package under negotiation, as the US and India look to remove long-standing irritants to ties. Traders took note of a private report that India has deferred its plan for a second time to impose retaliatory tariff worth close to $235 million on 29 American products by 45 days to November 2. However, markets took U-turn and entered into red terrain in last leg of trade with India Ratings' report that though the Centre may manage to achieve the debt-to-GDP ratio target of 40% by FY23, the states achieving the 20% target looks difficult as most of them have not budgeted so far. Markets extended losses to end near intraday lows with report that SEBI has changed the fee structure for the Rs 25-trillion mutual fund (MF) industry, a decision that will hit the profits of asset management companies (AMCs) but result in savings for investors. Adding to the pessimism, a private report added that the country's rainfall deficit in the ongoing monsoon season widened to 10%, hovering on borderline drought conditions, following below-normal showers every month - a pattern of consistent shortfall not seen since 2004. Sentiments also got hit with another report that there has been a steep decline in economic confidence in India over the past year. Finally, the BSE Sensex declined 169.45 points or 0.45% to 37,121.22, while the CNX Nifty was down by 44.55 points or 0.39% to 11,234.35.

 

The US markets ended significantly in green terrain on Thursday, as traders continued to shrug off concerns about the escalating trade dispute between the U.S. and China. Traders also took some encouragement with upbeat economic data, with a report from the Labor Department showing initial jobless claims unexpectedly dipped to their lowest level in nearly fifty years in the week ended September 15th. The Labor Department said jobless claims edged down to 201,000, a decrease of 3,000 from the previous week's unrevised level of 204,000. The street had expected jobless claims to rise to 210,000. With the unexpected decrease, jobless claims fell to their lowest level since hitting 197,000 in November of 1969. A separate report from the Conference Board showed a continued increase by its index of leading economic indicators in the month of August. The Conference Board said its leading economic index rose by 0.4 percent in August after climbing by an upwardly revised 0.7 percent in July. Meanwhile, the National Association of Realtors released a report showing existing home sales were unexpectedly flat in August, with sales growth in the Northeast and Midwest offset by downturns in the South and West. Dow Jones Industrial Average surged 251.22 points or 0.95 percent to 26,656.98, the S&P 500 gained 22.80 points or 0.78 percent to 2930.75 and Nasdaq was up by 78.19 points or 0.98 percent to 8,028.23.

 

After hitting two-month high in previous session, crude oil futures failed to hold momentum and drifted down to end lower on Thursday after President Donald Trump in a tweet called for the Organization of the Petroleum Exporting Countries (OPEC) to maintain lower crude-oil prices. Trump's comments came ahead of a closely watched meeting in Algiers of a committee made up of representatives of OPEC members and its outside allies on September 23. Traders also probably weighed the prospects of a possible drop in demand for crude amid escalating trade tensions between the US and China. Benchmark crude oil futures for October declined 32 cents or 0.5 percent to settle at $70.80 a barrel on the New York Mercantile Exchange. November Brent crude fell 70 cents or 0.9% to settle at $78.70 a barrel on London's Intercontinental Exchanged.

 

Snapping its 2 days continuous drubbing, Indian rupee recovered against the American currency on Friday following selling of dollar by exporters as well as banks. Support came with report stating that the finance ministry on September 18 asked ministries to shortlist commodities and goods for import curbs by increasing customs duty, to ease the pressure on the rupee and keep the widening Current Account Deficit (CAD) on check. Rupee sentiments also remained positive with another report stating that Indian farmers and US manufacturers of medical devices could be among the main winners in a trade package under negotiation, as the US and India look to remove long-standing irritants to ties. On the global front, the US dollar was lower against other currencies on Wednesday amid trade war tensions while the pound rose after better than expected inflation data. Finally, the rupee ended at 72.37, 60 paise stronger from its previous close of 72.97 on Tuesday.

 

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 4698.23 crore against gross selling of Rs 5801.96 crore, while in the debt segment, the gross purchase was of Rs 372.65 crore with gross sales of Rs 551.06 crore. Besides, in the hybrid segment, the gross selling was of Rs 0.28 crore against on buying.

 

The US markets jumped higher on Thursday as traders took some support with a report from the Labor Department showing initial jobless claims unexpectedly dipped to their lowest level in nearly fifty years in the week ended September 15. Asian markets were trading mostly in green on Friday as investors viewed Beijing's and Washington's fresh exchange of import tariffs as less harmful than initially feared. Extending losses for third straight session, the Indian markets ended a volatile trading day in the red territory on Wednesday due to higher crude oil prices. Besides, heavy losses in finance stocks added pressure on the markets. Today, the markets are likely to make gap-up opening tacking firm global cues. Traders will be getting some encouragement with Prime Minister Narendra Modi's statement that the size of Indian economy would double to $5 trillion by 2022, with manufacturing and agriculture contributing $1 trillion each. Also, there will be some support with report that India is hopeful of resolving the issue of tariffs on steel and aluminium with the US soon and both sides are engaged in finalising a trade package. Traders will be getting some support with report that the Reserve Bank eased norms for companies in the manufacturing sector to raise overseas funds and allowed Indian banks to market Masala Bonds in line with the government's measures to prop up the rupee. However, there may be some cautiousness with EEPC India's statement that raising the import duty on steel or steel products will widen the current account deficit and severely hit engineering exports from the country. Meanwhile, the federation of chambers of commerce and industry (FICCI) has called for a joint meeting between the industries and the government to chalk out a strategy balancing expenditure, and boosting economic growth. There will be some buzz in select banking sector stocks with rating agency Moody's statement that the proposed merger of Bank of Baroda, Vijaya Bank and Dena Bank is credit positive because the merger would provide scale efficiencies and help improve the quality of corporate governance.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,278.90

11,228.08

11,370.58

BSE Sensex

37,290.67

37,107.20

37,609.79

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

SBI

407.59

271.50

267.05

279.40

Vedanta

182.56

230.10

227.28

232.63

Yes Bank

161.85

319.20

315.25

325.95

ICICI Bank

159.42

320.95

317.07

324.77

Reliance Industries

112.66

1,210.75

1,199.83

1,222.83

 

  • SBI is planning to install solar panels over around 10,000 ATMs across the country in the next two years. 
  • ONGC's overseas subsidiary ONGC Videsh is planning to exit Kazakhstan's Satpayev block since it could not find commercially exploitable oil. 
  • Tata Steel has completed the acquisition of 51% equity stake in Creative Port Development. 
  • TCS' strategic business unit TCS iON has entered into a strategic business partnership with The Training Room.
News Analysis

Manali Petrochemicals has commenced supply of its products Neuthane Polyurethane Cast Elastomers on September 19, 2018.

Manali Petrochemicals is a leader in the production and marketing of Propylene Oxide, Propylene G...


Shankara Building Products has opened 134th store under the ‘Shankara Buildpro' brand at Nagole in Telangana. The store houses a diverse basket of product offerings.

Shankara Building Products is one the leading organized...


NBCC India has secured the total business of around Rs 921.67 crore in the month of August, 2018. Earlier, the company had secured the total business of around Rs 228 crore in the month of July, 2018.

NBCC (India) is ...


Hindustan Petroleum Corporation (HPCL) has forayed into the packaged drinking water sector with the launch of Reminero, a product in partnership with city-based Indian Institute of Chemical Technology (IICT).

The company...