NSE Intra-day chart (14 September 2017)
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Market Commentary 15 September 2017
Markets to make a soft start on muted global cues


Indian equity benchmarks ended the choppy day of trade with slender gains on Thursday, as initial optimism fizzled out in second half and market pared most of their gains. Markets started the session on positive note with traders taking encouragement with private report stating that India's GDP growth is expected to be around 7.1% this fiscal following a likely pick up in industrial production as firms resort to restocking post GST especially ahead of festive season. Some support also came with report that industry body ASSOCHAM has sought from the government slew of tax relief for companies against whom insolvency proceedings have been initiated. It added that the resolution plans approved after factoring in these reliefs/concessions will result in quick revival of assets, freeing up liquidity for banks for further lending, increased economic activity, job creation, increased contribution to the exchequer and will have multiplier effect on the associated economy. However, markets took U-turn in noon deals and pared most of their initial gains after the sharp rise seen in CPI based inflation, the latest data released by the government has shown that the WPI inflation rate too registered significant increase in August month. Surge in prices of foods articles, vegetable and  fuel products mainly pulled the country's WPI higher to 3.24% in August against 1.09% increase in the same month a year ago and 1.88% recorded in the previous month. Sentiments also remained dampened on report that India has been placed at a low 103 rank, the lowest among BRICS economies, on the WEF's Global Human Capital Index, which has been topped by Norway. India also ranks among the lowest in the world when it comes to the employment gender gap. Finally, the BSE Sensex rose 55.52 points or 0.17% to 32,241.93, while the CNX Nifty was up by 7.30 points or 0.07% to 10,086.60.

 

The US markets closed mostly lower on Thursday, while the Dow closed at a record for a third session in a row, the broader markets sagged on the back of weak retail shares. North Korea made more threats in response to the latest United Nation sanctions, vowing to sink Japan with a nuclear weapon and reduce the US mainland to ashes and darkness. The acerbic rhetoric comes after the UN Security Council on Monday unanimously adopted tougher sanctions against North Korea targeting its exports and oil imports. On the economy front, the number of Americans who sought unemployment benefits in early September declined, but the effects of Hurricane Irma could keep new jobless claims at elevated levels over the next few weeks. Initial jobless claims in the period running from September 3 to September 10 slipped to 284,000 from 298,000. Claims had surged at the end of August to a two-and-a-half year high after Hurricane Harvey puts lots of people in the thriving Houston metropolis temporarily out of work. The Nasdaq dropped 31.11 points or 0.48 percent to 6,429.08, the S&P 500 lost 2.75 points or 0.11 percent to 2,495.62, while the Dow Jones Industrial Average added 45.3 points or 0.20 percent to 22,203.48. 

 

Crude oil futures rallied on Thursday, with Nymex crude surging above $50 a barrel for the first time in a month. The prices were buoyed by a pair of reports earlier in the week suggesting that rising global oil demand could stem the glut in crude supplies. Also, investors continue to cheer an International Energy Agency (IEA) report released Wednesday estimating global oil demand this year will climb by the most since 2015. Benchmark crude oil futures for October delivery rose $0.59 or 1.2 percent to settle at $49.89 a barrel on the New York Mercantile Exchange. Brent crude for October delivery rose 0.20 percent to $55.27 a barrel on the ICE.

 

Indian rupee ended weaker against the American currency on Thursday, due to fresh dollar demand from banks and importers amid foreign fund outflows. Investors remained concerned with data released by the commerce and industry ministry highlighting that higher inflation in food and fuel products drove India's Wholesale Price Inflation (WPI) to 3.24% in August from 1.88% in July. Food articles inflation was up 5.75% with that in vegetables at 44.91% and onions at 88.46%. Moreover, fall in the domestic currency was also due to dollar strengthened against some other currencies overseas. On the global front, dollar held steady near a four-week high against yen, with traders looking to US consumer inflation data later in the day for clues on the possible timing of the Federal Reserve's next rate rise. Finally, the rupee ended at 64.12, 13 paise weaker from its previous close of 63.99 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 7085.53 crore against gross selling of Rs 4499.24 crore, while in the debt segment, the gross purchase was of Rs 1139.23 crore with gross sales of Rs 1415.25 crore.

 

The US markets made a mixed closing in the last session and while the Dow climbed to a new record closing high, the Nasdaq and S&P 500 ended in negative territory, following the release of a Labor Department report showing a bigger than expected increase in consumer prices in the month of August. The Asian markets have made a mixed start and some of the indices are in red, though the Japanese market was trading marginally in green showing a muted broader market reaction to the latest North Korean provocation, as it fired missile over Japan after UN sanctions. The Indian markets after a choppy day of trade and losing their initial momentum, managed a modestly positive close in last session and overlooked the report that country's wholesale price inflation (WPI) rose to a four-month high of 3.24 percent in August. Today, the start is likely to be a bit cautious on North Korea's new provocative move of firing another ballistic missile over Japan.  There will be some concern with SBI research report stating that country's GDP is likely to remain below 6 percent in the second quarter of 2017-18 owing to muted agriculture growth and sluggish performance of manufacturing and mining sector. Meanwhile, a United Nations report has said that effects of demonetisation and rollout of the Goods & Services Tax regime on the informal sector and reduction in pace of credit creation may affect India's growth prospects and the country unlikely to serve as the “growth pole'' for the global economy in the near future. There will be some buzz in the textile sector, as the Textile Commissioner has said that country's technical textile market has huge growth potential and it is expected to grow at 12 per cent per annum to reach $23 billion (Rs 1,50,000 crore) in 2020. There will be some buzz from the primary market too, as the ICICI Lombard General Insurance IPO will kick off today.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10086.60

10062.47

10118.62

BSE Sensex

32241.93

32176.31

32318.08

 

Nifty Top volumes

 

Stock

Volume

(in Lacs)

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

BPCL

158.28

500.50

483.40

521.25

ONGC

153.72

159.35

157.57

161.82

Axis Bank

151.68

519.75

507.30

527.00

Tata Power

151.22

85.25

84.23

86.78

Vedanta

145.85

319.70

314.20

327.85

 

  • Wipro has become the official technology provider to McLaren Technology Group to help drive digitalization across its businesses.
  • HDFC Bank has retained its No 1 position in the BrandZ India top 50, doubling its brand value since 2014 with a sustained focus on improving services.
  • TCS has launched 'ignion', the company's award-wining cognitive automation solution for IT operations, in Japan.
  • SBI's investment banking arm SBI Capital Markets is looking to set up independent unit for insolvency resolution. 

 

 

News Analysis