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NSE Intra-day chart (01 February 2023)
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Market Commentary 02 February 2023
Benchmarks to make negative start despite positive global cues


Indian equity benchmarks ended volatile day on a mixed note on Wednesday as the euphoria about the Budget fizzled out, with investors going for profit-taking ahead of the Fed interest rate decision. Key gauges made a jubilant start and traded with positive bias in the first half of the session, as traders took some encouragement with Chief Economic Advisor (CEA) V Anantha Nageswaran's statement that India has the potential to grow at 6.5-7 per cent and will become a $5 trillion economy by 2025-26 and $7 trillion by 2030 depending on exchange rate fluctuation. Sentiments remained up-beat as Federation of Indian Export Organisations (FIEO) said increasing exports to markets such as Brazil, South Africa and Saudi Arabia are boosting the growth of the country's outbound shipments. Benchmarks extended their gains in afternoon session after Union Finance Minister Nirmala Sitharaman in her Budget speech in Parliament announced that the government proposes to increase capital expenditure outlay by 33 per cent to Rs 10 lakh crore in 2023-24, which would be 3.3 per cent of the GDP. Besides, Finance Minister tweaked the slabs to provide some relief to the middle class by announcing that no tax would be levied on annual income of up to Rs 7 lakh under the new tax regime. Some support came with the government data showing that production of eight infrastructure sectors rose at a three-month high of 7.4 per cent in December 2022 against 4.1 per cent in the same month of previous year on a better show by coal, fertiliser, steel, and electricity segments. Adding more optimism, the finance ministry said the GST collection in January surged to over Rs 1.55 lakh crore, the second highest-ever mop-up. However, markets failed to hold gains in late afternoon deals. Some concerns came with a private survey showing that India's manufacturing industry started the year on a weaker note, expanding at the slowest pace in three months in January as output and sales growth slackened. The Manufacturing Purchasing Managers' Index, compiled by S&P Global, fell to 55.4 last month from 57.8 in December. Still, it remained well above the 50-mark separating growth from contraction for a 19th straight month. Finally, the BSE Sensex rose 158.18 points or 0.27% to 59,708.08 and the CNX Nifty was down by 45.85 points or 0.26% to 17,616.30.


The US markets settled higher on Wednesday with Nasdaq ending gain of two percent. The late-day rally on markets came even as the Federal Reserve announced its widely expected decision to raise interest rates by another quarter point and signaled further rate hikes. After a two-day meeting, the Fed said it has decided to raise the target range for the federal funds rate by 25 basis points to 4.50 to 4.75 percent. The latest interest rate hike comes after the central bank raised rates by 75 basis points in November and by 50 basis points in December. The Fed also said it anticipates ongoing increases in interest rates will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. Fed Chair Jerome Powell said the central bank does not believe rates are yet at a sufficiently restrictive policy stance and suggested a couple of more rate hikes will be needed to get to that level. The next monetary policy meeting is scheduled for March 21-22, with CME Group's FedWatch Tool currently indicating an 81.8 percent chance the Fed will raise rates by another 25 basis points. On the sectoral front, Semiconductor stocks turned in some of the market's best performances on the day, with the Philadelphia Semiconductor Index spiking by 5.2 percent to a five-month closing high. Chipmaker Advanced Micro Devices (AMD) helped lead the sector higher, skyrocketing by 12.6 percent after reporting better than expected fourth quarter results.


Crude oil futures ended deeply in red on Wednesday on rising crude inventories in the US. Data from Energy Information Administration (EIA) showed crude inventories in the US rose by 4.1 million barrels last week, rising for a sixth straight week. Crude inventories were expected to rise just 0.4 million barrels last week. Gasoline inventories increased by 2.6 million barrels last week, while distillate stockpiles rose by 2.3 million barrels in the week. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, decided to keep their output policy unchanged. Benchmark crude oil futures for March delivery fell $2.46 or 3.1 percent at $76.41 a barrel on the New York Mercantile Exchange. Brent crude for April delivery dropped $2.62 or 3.1 percent at $82.84 (Provisional) a barrel on London's Intercontinental Exchange.


Indian rupee tumbled against dollar on Wednesday after Finance Minister Nirmala Sitharaman presented the Union Budget for 2023-24. Sentiments were downbeat after report stated that India's manufacturing industry started the year on a weaker note, expanding at the slowest pace in three months in January as output and sales growth slackened. The Manufacturing Purchasing Managers' Index, compiled by S&P Global, fell to 55.4 last month from 57.8 in December. On the global front, dollar edged lower against the euro on Wednesday ahead of an eagerly-awaited Federal Reserve policy decision with investors hoping the U.S. central bank will signal the end of its interest rate hiking cycle. Finally, the rupee ended at 81.90 (Provisional), weaker by 2 paise from its previous close of 81.88 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 15171.56 crore against gross selling of Rs 19829.43 crore, while in the debt segment, the gross purchase was of Rs 2253.61 crore against gross selling of Rs 585.77 crore, while in the hybrid segment, the gross buying was of Rs 3.60 crore against gross selling of Rs 30.35 crore.


The US markets ended higher on Wednesday after the Federal Reserve raised interest rates by a quarter of a percentage point. The move was widely expected, and the Fed signaled that ongoing increases to short-term rates will be appropriate. Asian markets were trading mostly in green in early deals on Thursday amid the United States Federal Reserve raised interest rates by 25 basis points and predicted the US economy will avoid a contraction this year. Indian equity markets ended flat on Wednesday after Finance Minister Nirmala Sitharaman presented the Budget in the Lok Sabha. Today, markets are likely to make negative start, despite firm cues from global markets, amid Federal Reserve Chair Jerome Powell said policymakers expect to deliver a couple more interest-rate increases before putting their aggressive tightening campaign on hold. There may be some cautiousness as an analyst at Moody's Investors Service said that the Indian federal government's aim to achieve a fiscal deficit target of 4.5% of gross domestic product (GDP) by 2025/26 could see some risks. The current pattern suggests that perhaps there could be some upward pressure on expenditure especially if they (government) continue with this focus on capex. Meanwhile, a private surveys report said that Manufacturing activity across the United States, Europe and Asia contracted again last month, underscoring the fragility of the global economic recovery, although factories in the euro zone at least may have passed the trough. However, some respite may come later in the day as Commerce and Industry Minister Piyush Goyal said a number of measures such as tweaks in customs duties on certain products announced in the Union Budget for 2023-24 will help boost the country's exports. He said that despite global economic uncertainties, India's goods and services exports together are registering nearly 14-15 per cent growth. Some support may also come in as the Centre for Monitoring Indian Economy's (CMIE's) data has showed that India's unemployment rate fell to 7.14% in January, the lowest in four months, from 8.30% in the previous month. It showed the urban unemployment rate declined to 8.55% in January from 10.09% in the previous month, while the rural unemployment rate slipped to 6.48% from 7.44%. There may be some buzz in banking sector related stocks as Finance Minister Nirmala Sitharaman proposed certain amendments to the Banking Regulation Act, the Banking Companies Act and the Reserve Bank of India Act to improve bank governance and enhance investors' protection. In her Budget speech, the finance minister said reforms in the financial sector and innovative use of technology have led to financial inclusion at scale, better and faster service delivery, ease of access to credit and participation in financial markets.


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  • Reliance Industries' step down arm -- Reliance Consumer Products has entered into a strategic partnership with Sri Lanka headquartered Maliban Biscuit Manufactories.
  •  Tata Motors has raised the second and final tranche of Rs 3,750 crore from TPG Rise Climate as per an agreement inked in 2021.
  •  Tata Consultancy Services has launched Clever Energy Solution on Google Cloud to Help Organizations Achieve their Net Zero Goals.
  •  Coal India has reported rise of 69.41% in its consolidated net profit at Rs 7719.11 crore for Q3FY23 as compared to Rs 4556.54 crore for the same quarter in the previous year.
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