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NSE Intra-day chart (07 September 2018)
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Market Commentary 10 September 2018
Markets likely to open in red amid weak global cues


 

Friday turned out to be a fabulous day of trade for Indian equity benchmarks, with frontline gauges re-conquering their crucial 11,550 (Nifty) and 38,300 (Nifty) levels. Key gauges started the session on a pessimistic note, as traders remained concerned with NITI Aayog CEO Amitabh Kant's statement that India needs to cut down on oil imports and switch towards electric mobility, and stressed on the Centre's focus towards urban mobility. However, traders turned optimistic and markets gained momentum to enter into green terrain with Union Minister for Commerce and Industry Suresh Prabhu's statement that with phenomenal changes in social and economic sector reforms, India will become a five-trillion-dollar economy in seven years from the present 2.6 trillion dollars. Traders also took some support with report that India and the US on September 6, pledged to expand their bilateral trade and economic partnership with a view to promoting investment and job creation. Markets extended gains in last leg of trade to end near intraday highs, as credit rating agency, ICRA in its latest report revealed that aggregate revenues of Indian corporate sector witnessed rise of 17.1% during the first quarter of the current fiscal year (Q1FY19), on a lower base in the year-ago period due to impact of GST implementation. Traders took some encouragement with reports that the newly notified annual GST return forms will go a long way in checking tax evasion by providing the entire financial transactions logged by an assessee to the revenue department. Some support also came with report that the Centre is planning to slash the number of GST rate slabs from the present five to two in the near future. Besides, the market participants took note of Federation of Indian Export Organisations' statement that the commerce ministry should direct the Export Credit Guarantee Corporation (ECGC) to provide liberal insurance coverage to consignments with a view to promote overseas shipments. Finally, the BSE Sensex surged 147.01 points or 0.38% to 38,389.82, while the CNX Nifty was up by 52.20 points or 0.45% to 11,589.10.

 

The US markets ended in red on Friday with losses of around quarter a percent, capping off a volatile week for investors as rising trade fears and a tech sell-off led to broad weekly losses. Sentiments were weak after President Donald Trump said the US is ready to slap tariffs on an additional $267 billion worth in Chinese goods. His remarks come after a deadline for comments regarding tariffs on another $200 billion in Chinese goods had passed last night. Meanwhile China's Commerce Ministry has warned it will be forced to roll out necessary retaliatory measures if the US imposes any new tariffs. Further, cautiousness also prevailed in the markets on reports that that the US and Canada will likely end the week with no trade deal in place. Besides, investors grappled with a sharp decline in Technology stocks this week, this year's best-performing sector. Tech fell nearly 3% as Wall Street fretted over potential regulation for companies in the sector, especially social media giants like Twitter and Facebook. Their shares fell 13.3% and 7.2% this week, respectively, after top executives for the top two companies testified before Congress on how to stop online abuse and election meddling. Dow Jones Industrial Average dropped 79.33 points or 0.31 percent to 25916.54, the S&P 500 declined 6.37 points or 0.22 percent to 2871.68 and Nasdaq was down by 20.18 points or 0.25 percent to 7902.54.

 

Crude oil futures ended marginally lower on Friday, marking a loss of 2.9% for the week, the first weekly loss since mid August. Concerns over the potential for weaker energy demand on the back of global trade tensions pressured prices. The potential for new US tariffs on Chinese goods has also contributed to concerns over the potential for weaker energy demand. However, expectations for tighter supplies as US oil sanctions on Iran go into effect later this year provided some support. Benchmark crude oil futures for October dropped 2 cents to settle at $67.75 a barrel on the New York Mercantile Exchange. However, November Brent crude gained 33 cents or 0.4% to settle at $76.83 a barrel on London's Intercontinental Exchanged.

 

Snapping seven-day record closing low, Indian rupee recovered against dollar on Friday, on the back of sustained bouts of dollar selling from banks and exporters. Investors' sentiment turned positive with Union Minister for Commerce and Industry Suresh Prabhu's statement that with phenomenal changes in social and economic sector reforms, India will become a five-trillion-dollar economy in seven years from the present 2.6 trillion dollars. Traders also took some support with report that India and the US on September 6, pledged to expand their bilateral trade and economic partnership with a view to promoting investment and job creation. On the global front, The British pound jumped against dollar and euro on Friday after EU's chief Brexit negotiator Michel Barnier said the European Union was open to discussing other backstops on the Irish border issue. Finally, the rupee ended at 71.74, 24 paise stronger from its previous close of 71.98 on Thursday.

 

The FIIs as per Friday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 5666.08 crore against gross selling of Rs 6526.96 crore, while in the debt segment, the gross purchase was of Rs 566.07 crore with gross sales of Rs 1301.52 crore. Besides, in the hybrid segment, there was no gross buying and gross selling.

 

The US markets declined on Friday amid ongoing trade concerns after President Donald Trump suggested he may impose tariffs on another $267 billion worth of Chinese goods. Asian markets were trading mostly in red early deals on Monday as trade tensions between the US and China remains in focus. Extending gains for second straight day, the Indian markets ended higher on Friday, following stability in crude oil prices and rupee after recent sharp moves. Today, the markets are likely to make negative start amid weak global cues. There will be some cautiousness with the State Bank of India's (SBI) report that with the currency losing more than 11% to the dollar this year, India will have to shell out an extra Rs 68,500 crore when repaying short-term debt in the coming months. However, traders may get some comfort later in the day with the Reserve Bank of India's (RBI) data showing that India's current account deficit (CAD) as a percentage of GDP declined marginally to 2.4% in the April-June quarter of 2018-19 against 2.5% in the year-ago period. There may be some support with the government pegging the right value of the rupee at 68-70 to the dollar, asking foreign currency borrowers and importers not to panic. Economic affairs secretary Subhash Chandra Garg said that there was no reason for further depreciation of the Indian currency and no extraordinary measures were needed as of now. Traders may also be reacting to Federation of Indian Export Organisations' (FIEO) statement that the commerce ministry should direct the Export Credit Guarantee Corporation (ECGC) to provide liberal insurance coverage to consignments with a view to promote overseas shipments. Meanwhile, in relief to foreign investors worried over new KYC and beneficiary ownership norms, regulator SEBI initiated a public consultation process for finalising the new guidelines after a high-powered panel suggested changes on several contentious proposals and more time for compliance. There will be some buzz in steel sector stocks with report that India may impose anti-dumping duty of up to $185.51 per tonne for five years on certain varieties of Chinese steel with a view to guard domestic players from cheap imports of the commodity from the neighbouring country.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,589.10

11,514.67

11,633.27

BSE Sensex

38,389.82

38,164.17

38,518.51

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

488.30

323.40

316.45

335.70

Tata Motors

261.89

277.40

271.13

281.78

Vedanta

243.36

230.25

226.73

233.73

SBI

237.17

291.65

288.77

295.22

Sun Pharma

220.75

664.25

646.17

676.17

 

  • Infosys has formed a JV with Temasek, the global investment company headquartered in Singapore. 
  • Bharti Airtel's Payments Bank has offered card-less cash withdrawals at select ATMs across the country using instant money transfer technology. 
  • HDFC Bank has retained its top spot in the BrandZ India Top 50 for the fifth year in a row, growing its brand value by 21 percent to $21.7 billion in 2018. 
  • Tata Motors' subsidiary -- JLR has reported total retail sales of 36,629 vehicles in August 2018, down 4.9% Y-o-Y.
News Analysis