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NSE Intra-day chart (03 October 2019)
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Market Commentary 04 October 2019
Markets to open marginally in green ahead of RBI's policy decision


Bears held tight grip on Indian equity markets on Thursday, with Sensex and Nifty ending lower. The start of the day was negative, as the finance ministry in its latest data showed that Goods and services tax collection dropped to a 19-month low of Rs 91,916 crore in September 2019 witch was 2.67% lower than the collection in the corresponding month last year at Rs 94,442 crore and 6.4% below the last month's figure of Rs 98,202 crore. Adding more worries, S&P Global Ratings slashed India's Gross Domestic Product (GDP) growth projection to 6.3% for the current financial year (FY20) from 7.1% forecasted earlier, amid decline in private consumption. Weak trade persisted during whole trading day, on the back of weak cues from the global markets. Market participants remained pessimistic, amid a report stating that the Finance Ministry made it clear that companies opting for a lower tax of 22% will not be eligible for accumulated additional depreciation and Minimum Alternative Tax (MAT) credit. The street failed to take any sense of relief with Finance Minister Nirmala Sitharaman's statement that the Insolvency and Bankruptcy Code has improved business climate in the country by making it easier for enterprises to exit in case of difficulties. Finally, the BSE Sensex fell 198.54 points or 0.52% to 38,106.87, while the CNX Nifty was down by 45.90 points or 0.40% to 11,314.00.


The US markets ended higher on Thursday on account of bargain hunting, with traders picking up stocks at reduced levels following recent weakness. The strength that emerged on markets was also as investors bet that signs this week of a slowing economy will prompt the Federal Reserve to lower interest rates for the third time this year at its late October meeting. On the economic front, after reporting a sharp increase in new orders for US manufactured goods in the previous month, the Commerce Department released a report showing a slight pullback in factory orders in the month of August. The Commerce Department said factory orders edged down by 0.1 percent in August after surging up 1.4 percent in July. The modest decrease in factory orders came as a 0.3 percent decline in orders for non-durable goods more than offset a 0.2 percent uptick in orders for durable goods. Besides, the Institute for Supply Management (ISM) released a report showing growth in the US service sector slowed by more than anticipated in the month of September. The ISM said its non-manufacturing index dropped to 52.6 in September after climbing to 56.4 in August. While a reading above 50 still indicates service sector growth, the index has been expected to show a more modest dip to 55.0. With the much bigger than expected decrease, the non-manufacturing slumped to its lowest level since hitting 51.8 in August of 2016. Meanwhile, a day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report showing a modest increase in first-time claims for US unemployment benefits in the week ended September 28. The report said initial jobless claims rose to 219,000, an increase of 4,000 from the previous week's revised level of 215,000. Dow Jones Industrial Average surged 122.42 points or 0.47 percent to 26201.04, Nasdaq gained 87.02 points or 1.12 percent to 7872.27 and S&P 500 was up by 23.02 points or 0.80 percent to 2910.63.


Crude oil futures ended slightly lower on Thursday, extending losses to an eighth straight session, as worries over global demand persist. Despite geopolitical concerns and OPEC-led production cuts, crude oil supply has not been any significantly hit. Meanwhile, increasing fears of a recession after recent data suggested continued contraction in manufacturing activity in the US has raised concerns about the outlook for energy demand. Besides, the EIA reported that domestic supplies of natural gas rose by 112 billion cubic feet for the week ended September 27. The data were expected to show a build of 109 billion cubic feet, on average. Benchmark crude oil futures for November declined 19 cents or 0.4 percent to settle at $52.45 a barrel on the New York Mercantile Exchange. However, December Brent added 2 cents or 0.03 percent to settle at $57.71 a barrel on London's Intercontinental Exchange.


Snapping 2-day falling streak, Indian rupee bounced back against the greenback on Thursday, on the back of fresh dollar selling by exporters and some banks. Traders took support with DPIIT Secretary Guruprasad Mohapatra's statement that with a strong policy driven government at the Centre, favourable conditions exist in India to achieve the target of $5 trillion economy by 2024. Traders also took a note of World Economic Forum's (WEF) statement that India, a young economy with lot of potential, has demonstrated remarkable strength and resilience amid global slowdown. Moreover, dollar losing sheen against some other currencies overseas supported the rupee. On the global front, dollar eased on Thursday, as investor anxiety deepened over fresh signs of slowing US economic growth and a broadening of global trade frictions. Finally, the rupee ended at 70.87, 20 paise stronger from its previous close of 71.07 on Tuesday.


The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 5450.65 crore against gross selling of Rs 6987.13 crore, while in the debt segment, the gross purchase was of Rs 459.12 crore with gross sales of Rs 1020.36 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.27 crore against gross selling of Rs 8.84 crore.


The US markets ended higher on Thursday after two sessions of dramatic losses as investors bet a string of disappointing economic data would spur the Federal Reserve to continue cutting interest rates. Asian markets are trading mixed on Friday as investors awaited the key monthly American employment report and subsequent comments due from Federal Reserve Chairman Jerome Powell. Indian markets extended their southward journey for fourth straight session and ended lower with cut of around half a percent on Thursday amid fresh trade concerns globally. Today, the markets are likely to make slightly positive start ahead of outcome of Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) meeting to be announced later in the day. There are expectations that the RBI is likely to go for yet another rate cut, as inflation is within the comfort zone and the need to boost the economy is pressing. If the RBI announces a further rate cut of up to 25 bps, it will be the fifth in a row by the apex bank. Also, investors will be eyeing Services PMI data for the month of September to be out later in the day. Traders will be getting some encouragement with Niti Aayog CEO Amitabh Kant's statement that there will be many more structural reforms by the government in the coming days to push economy to a high growth trajectory. He added that the government announced a series of economic boosters including capitalisation of public sector banks, merging some of them, package for exports, and bringing down corporate tax rate. Some support may also come with report that Commerce and Industry Minister Piyush Goyal and US Secretary for Commerce Wilbur Ross held discussions to increase bilateral trade between the countries. Besides, the US said that neither Indian nor American government stated that there will be a trade agreement in five minutes but it does not see any structural reason which might stop both the nations to have a trade agreement pretty quickly. There will be some buzz in the reality stocks with Crisil's report that as many as 10 commercial real estate developers and operators have the potential to raise as much as Rs 1.5 lakh crore through the real estate investment trust (REIT) route by monetising 184 million sqft space. PSU stocks will be in focus with report that the government has decided to rely on cash-rich central public sector enterprises to rescue its strategic sale programme, with tepid interest coming from the private sector to take over controlling interest in some of sick and loss-making companies. There will be some reaction in insurance stocks with report that the Insurance Regulatory and Development Authority of India (Irdai) has set a working group to revisit the product structure of title insurance.


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



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  • Infosys and SAP have collaborated to Accelerate Enterprise Digital Transformation for Clients. 
  • Hero MotoCorp has reported sales of 612,204 units of motorcycles and scooters in the month of September 2019. 
  • Hindalco Industries' wholly owned subsidiary -- Novelis Inc. has received approval from European Commission for proposed acquisition of Aleris Corporation.  
  • Coal India has reported fall in its production by 23.5 percent to 30.77 million tonnes in September.
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