NSE Intra-day chart (15 September 2017)
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Market Commentary 18 September 2017
Markets to make a green start of the new week


Buying which emerged in last leg of trade helped markets to erase all of their initial losses to end flat on Friday. Markets started off on pessimistic note, as geo-political worries resurfaced with North Korea's new provocative move of firing another ballistic missile over Japan. Key gauges traded in red terrain for most part of the day, as sentiments remained dampened 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. The GDP stood at a three year low at 5.7% for April-June quarter of 2017-18, which the report said has raised concerns about the annual GDP numbers for the fiscal. Traders also remained concerned with United Nations' report stating that effects of demonetisation and rollout of the Goods and 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. Domestic bourses even went to test psychological 32,150 (Sensex) and 10,050 (Nifty) levels, but the key gauges got some support near those intraday low levels as they trim their losses from thereon and ended near their neutral lines, as investors continued hunt for fundamentally strong stocks. Traders took some sense of relief with report that India and Japan have signed 15 key agreements including open sky agreement, after the historic launch of India's first bullet train project between Ahmedabad and Mumbai, to further expand the horizon of their bilateral relationship. Finally, the BSE Sensex gained 30.68 points or 0.10% to 32272.61; however the CNX Nifty was down by 1.20 points or 0.01% to 10085.40.

 

The US markets closed higher on Friday, posting sharp weekly gains, with a big assist from rally in telecommunication and bank shares, as Wall Street shook off North Korea's latest missile launch. Stocks initially struggled for direction as investors weighed North Korea's decision to fire a missile over Japan for the second time in a month, but soon found firmer footing. The New York Federal Reserve reduced its estimate of US gross domestic product growth for the third quarter and fourth quarter to below 2 percent, based on unexpected falls in industrial output and retail sales in August. On the economy front, industrial production plunged in August mainly due to disruptions from Hurricane Harvey. Output sank 0.9% last month. It was the biggest decline since May 2009 when the economy was in recession. This is the first decline in production in seven months. Output in July was revised to a 0.4% gain from the prior estimate of a 0.2% increase. There were across-the-board declines in output in August. Meanwhile, US retail sales fell in August for the second time in three months, reflecting fewer car purchases and reluctance by Americans to spend on a variety of consumer goods such as clothes and electronics. Sales at retailers nationwide dropped 0.2% to mark the biggest decline in six months. The Dow Jones Industrial Average added 64.86 points or 0.29 percent to 22,268.34, the Nasdaq gained 19.39 points or 0.30 percent to 6,448.47 and the S&P 500 edged higher by 4.61 points or 0.18 percent to 2,500.23. 

 

Crude oil futures maintained its momentum on Friday, making it best weekly gains in last seven weeks, after industry data showed the U.S. oil rig count dropped for a second week post-hurricanes. Also, there was rising expectations that higher oil demand will reduce excess crude supplies to Opec's five-year average target. Opec said production in August fell by 79,000 barrels a day (bpd) to 32.76 million as falling production from Venezuela, Iraq, the UAE and Saudi Arabia offset rising output from Nigeria. Benchmark crude oil futures for October delivery ended unchanged at $49.89 a barrel on the New York Mercantile Exchange. Prices were up 5.1% for the week. Brent crude for October delivery rose 0.23 percent to $55.60 a barrel on the ICE.

 

Indian rupee ended marginally higher against dollar on Friday due to sustained selling of the US currency by exporters and banks. Traders took some support with report that India and Japan have signed 15 key agreements including open sky agreement, after the historic launch of India's first bullet train project between Ahmedabad and Mumbai, to further expand the horizon of their bilateral relationship. However, the dollar rose to a position of strength overseas along with lackluster trade in the domestic equity market, restricted the further move. On the global front, dollar inched higher against yen on Friday, regaining its footing after taking a hit when North Korea fired a missile over Japan into the Pacific Ocean. Finally, the rupee ended at 64.08, 4 paise stronger from its previous close of 64.12 on Thursday.

 

The FIIs as per Friday'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 4020.69 crore against gross selling of Rs 4951.98 crore, while in the debt segment, the gross purchase was of Rs 1562.63 crore with gross sales of Rs 1415.22 crore.

 

The US markets surged in the last session, with Dow and S&P climbing to new record closing highs, as traders shrugged off some disappointing economic reports, as the data was impacted by Hurricane Harvey. The Asian markets have made mostly a positive start and some of the indices are up by over half a percent, as havens retreated after the worst-case scenarios for North Korea and hurricanes in the U.S. didn't eventuated. Japanese market too has moved higher after the yen weakened against dollar. The Indian markets recovering from their lows managed a positive close in the last session. Today, the start is likely to be mildly green-to-cautious amid lingering geo-political worries, traders will also be reacting to trade data announced after the market hours on Friday. India's exports grew by 10.29 percent on a yearly basis to $23.81 billion in August on account of rise in shipments of engineering, petroleum, chemicals and pharmaceuticals products. Imports too rose by 21.02 percent to $ 35.46 billion in August from $29.30 billion in the year-ago month due to rise in inward shipments of crude oil and gold. The trade deficit in the month widened to $ 11.64 billion from $ 7.7 billion during the same month a year ago. There will be buzz in the oil sector stocks, as the industry chamber Assocham has called for a cut in the cess on transport fuels, saying that the consumer is getting restive about a three-year high in the petrol prices and feels the market pricing mechanism is being distorted by tax hikes on petrol and diesel. Meanwhile, Petroleum Minister Dharmendra Pradhan has called for a ‘uniform tax mechanism' across the country for petroleum products and said that said petroleum products will need to be brought under the ambit of the goods and services tax (GST). There will be buzz from the primary market too, where Dixon Technologies and Bharat Road Network, will make stock market debut. Dixon Technologies' IPO was subscribed 117.83 times, while Bharat Road Network was subscribed 1.81 times.

 

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10085.40

10047.65

10119.15

BSE Sensex

32272.61

32155.29

32373.02

 

Nifty Top volumes

 

Stock

Volume

(in Lacs)

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

ONGC

254.54

166.75

161.22

170.07

ICICI Bank

226.33

291.60

289.85

294.45

SBI

184.05

271.50

269.43

274.03

Vedanta

178.74

319.00

312.85

324.15

ITC

131.48

269.30

267.42

271.97

 

  • Tata Motors has unveiled its commercial vehicle -- Tata Yodha -- in Nepal in association with its authorised partner Sipradi Trading.
  • Induslnd Bank has partnered with the ADB to provide a loan of up to $200 million to low income women borrowers in rural India.
  • Maruti Suzuki India's Japanese parent Suzuki Motor has decided to make electric cars at its factory in Gujarat for India and the world.
  • Wipro has been awarded a seven-year contract by innogy SE to manage their data center and cloud services.
News Analysis