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NSE Intra-day chart (16 July 2019)
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Market Commentary 17 July 2019
Markets to make a soft start tailing weak global cues


Indian equity indices remained in good mood on Tuesday, with Sensex and Nifty closing above their crucial psychological levels of 39,100 and 11,650, respectively. Markets made a cautious start of the day, as India's exports fell by 9.71% in the month of June 2019 over the same period in the previous year, due to a fall in shipments of gems and jewellery, engineering goods and petroleum products. However, markets soon staged sharp recovery, taking support with Finance Minister Nirmala Sitharaman's statement that GST collection of states and union territories (UTs) increased to Rs 5.18 lakh crore in the full financial year 2018-19, up from Rs 2.91 lakh crore collected in nine months of 2017-18. Key indices extended their gains in the last hour of the trade, tracking firm European markets. The street remained positive with Commerce and Industry Minister Piyush Goyal's statement that India is open to ideas from all sides to strengthen investors' confidence so that they can invest and participate in the country's development. He added that the government aims to give confidence to international investors, with the best of technologies, to come to India and invest. Some support also came with a private report stating that domestic catalysts suggest a largely positive outlook for the bond market in the short-term, despite the recent correction in Indian bond yields. Finally, the BSE Sensex gained 234.33 points or 0.60% to 39,131.04, while the CNX Nifty was up by 74.25 points or 0.64% to 11,662.60.


The US markets ended lower on Tuesday after President Donald Trump said that US-China trade talks still have a long way to go and once again threatened to impose tariffs on another $325 billion worth of Chinese goods. Further, cautiousness also prevailed in the markets as a mixed batch of US economic data led to uncertainty about the near-term outlook for interest rates. Raising concerns the Federal Reserve could refrain from cutting rates later this month, the Commerce Department released a report showing much stronger than expected US retail sales growth. The Commerce Department said retail sales rose by 0.4 percent in June, matching the downwardly revised increase in May. Street had expected retail sales to inch up by 0.1 percent. Closely watched core retail sales, which exclude autos, gasoline, building materials and food services, jumped by 0.7 percent in June after climbing by an upwardly revised 0.6 percent in May. ING Chief International Economist James Knightley said the report suggests consumer spending rose robustly in the second quarter, which he expects to help keep GDP growth above 2 percent. Meanwhile, a separate report from the Fed showed US industrial production was unexpectedly flat June, as a steep drop in utilities output offset increases in manufacturing and mining output. The Fed said industrial production was unchanged in June after climbing by 0.4 percent in May. Street had expected production to edge up by 0.2 percent. Besides, traders were also digesting earnings news from big-name companies such as Goldman Sachs, Johnson & Johnson, JPMorgan, and Wells Fargo. Dow Jones Industrial Average declined 23.53 points or 0.09 percent to 27335.63, Nasdaq fell 35.39 points or 0.43 percent to 8222.80 and S&P 500 was down by 10.26 points or 0.34 percent to 3004.04.


Crude oil futures ended sharply lower on Tuesday on reports that US Secretary of State Mike Pompeo said Iran is ready to enter negotiations over its missile program, easing concerns about tensions between Washington and Tehran that had put the flow of oil in the Middle East at risk. The report followed concerns that Iran may have seized a small United Arab Emirates oil tanker traveling through the Strait of Hormuz over the weekend. Besides, US oil inventories data are due out from the Energy Information Administration (EIA) on Wednesday. Benchmark crude oil futures for August declined $1.96 or 3.3 percent to settle at $57.62 a barrel on the New York Mercantile Exchange. September Brent dropped $2.13 or 2 percent to settle at $64.35 a barrel on London's Intercontinental Exchange.


Indian rupee ended weaker against dollar on Tuesday, due to fresh demand for the American currency from banks and importers and rising crude oil prices. Traders remained concerned as the country's exports entered the negative zone after a gap of eight months. According to the government data, India's exports fell by 9.71% in the month of June 2019 over the same period in the previous year, due to a fall in shipments of gems and jewellery, engineering goods and petroleum products. US dollar's gain against other currencies overseas also weighed on the local unit. On the global front, euro fell on Tuesday as investors waited for a sentiment reading of Germany's economy, although the prospect of more central bank easing starting with the Federal Reserve later this month kept currency moves limited. Finally, the rupee ended at 68.71, 17 paise weaker from its previous close of 68.54 on Monday.


The FIIs as per Tuesday'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 3623.46 crore against gross selling of Rs 3813.41 crore,while in the debt segment, the gross purchase was of Rs 1698.25 crore with gross sales of Rs 649.19 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.03 crore against gross selling of Rs 5.94 crore.


The US markets settled lower on Tuesday after President Donald Trump said an agreement with China on trade tariffs has a long way to go.  Asian markets are trading lower in early deals on Wednesday following overnight developments on the US-China trade front. Markets closed higher on Tuesday as all sectoral indices were higher except IT which lost over half a percent. Today, the start of the session is likely to be on negative side on weak global cues. There will be some cautiousness with Chief Economic Advisor K V Subramanian's statement that there is a need to tap foreign capital to accelerate growth from the current level of 7 per cent to 8 per cent. He added that achieving $5-trillion economy by 2024-25 is possible although the goal is slightly stretched. Traders may also remain concern on report that Tax officials detected Rs 37,946 crore worth of tax fraud in 2018-19 and Rs 6,520 crore in the April-June period of the current financial year after the GST implementation.  However, traders may take some support later the day With Finance Minister Nirmala Sitharaman' s statement that total bad loans of commercial banks declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in the 2018-19 fiscal on the back of steps taken by the government. The government has instituted a comprehensive 4R's strategy for recognition of non-performing assets (NPAs) transparently, resolution and recovery of value from stressed assets, recapitalising of public sector banks (PSBs) and reforms in PSBs so as to reduce their bad loans. Meanwhile, the government has invited proposals from entities for the deployment of electric vehicle charging infrastructure in big and smart cities. Proposals are invited from entities that intend to develop EV charging infrastructure in million-plus cities as per the 2011 census; and smart cities as notified by the Ministry of Housing and Urban Affairs. There will be some buzz in the solar stocks on report that a total of 80.46 GW of renewable energy capacity has been installed in the country as on June 30, 2019 which includes 29.55 GW from Solar & 36.37 GW from Wind power. The retail sector stocks will also keep buzzing with Commerce and industry minister Piyush Goyal stating that India's foreign direct investment (FDI) norms in the multi-brand retail sector are a very well thought out policy which are unlikely to change any time soon.  He said the 49 per cent FDI threshold in multi-brand retail must be respected in letter and spirit by all foreign brands. There will be some earnings announcements too to keep the markets buzzing.


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  • Cipla's wholly owned subsidiary -- Cipla EU has entered into a joint venture agreement with Jiangsu Acebright for incorporation of a joint venture company in China.
  • NTPC has raised Rs 4,300 crore through bonds, which would be used for capital expenditure and general corporate requirement.
  • HDFC Bank and Government of India's Common Service Centre SPV have launched a co-branded Small Business MoneyBack Credit Card.
  • Tech Mahindra's CSR arm --Tech Mahindra Foundation has set up a SMART Academy for Digital Media in Hyderabad.
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