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NSE Intra-day chart (03 May 2023)
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Market Commentary 04 May 2023
Benchmarks likely to get cautious start on Thursday


Indian equity benchmarks snapped 6-day winning streak and ended lower on Wednesday on the back of muted global cues. Markets opened lower and traded in a narrow range throughout the day as traders turned cautious with a private report that India's unemployment rate climbed to a four-month high, as there were more people joining the workforce compared to available jobs in Asia's third largest economy. Creating enough jobs for India's burgeoning population will remain a key challenge for Prime Minister Narendra Modi's government, especially as he looks to a third term in office in national elections due next summer. Some concern also came as the International Monetary Fund said that economies across the Middle East and Central Asia will likely slow this year as persistently high inflation and rising interest rates bite into their post-pandemic gains. The IMF's Regional Economic Outlook blamed in part rising energy costs, as well as elevated food prices, for the estimated slower growth. However, losses remained capped as data released by S&P Global showed that India's services sector surged in April as the sector's Purchasing Managers' Index (PMI) jumped to 62.0 from 57.8 in March. At 62.0, the services PMI is the highest in nearly 13 years. It has stayed above the key level of 50 that separates expansion in activity from a contraction for 21 months in a row. Some support came as data released by the Reserve Bank of India (RBI) showed that India's services exports shot up by a record 26.6 per cent in 2022-23 (FY23) to $322 billion, thus closing the gap with merchandise exports that grew only 6 per cent to $447 billion in the same period. Besides, provisional data from the National Stock Exchange showed foreign institutional investors (FII) bought shares worth Rs 1,997.35 crore on May 2, 2023. Finally, the BSE Sensex fell 161.41 points or 0.26% to 61,193.30 and the CNX Nifty was down by 57.80 points or 0.32% to 18,089.85.


The US markets ended in red on Wednesday, extending steep losses from the previous session, after the Federal Reserve announced its widely expected decision to raise interest rates by another quarter but appeared to signal a potential pause in rate hikes. The Fed decided to raise the target range for the federal funds rate by 25 basis points to 5 to 5.25 percent, making the tenth straight rate hike. The unanimous decision to continue raising rates came as the Fed noted inflation remains elevated while also observing that job gains have been robust in recent months and the unemployment rate has remained low. Fed Chair Jerome Powell said the central bank would take a data-dependent approach to future monetary policy decisions and stressed a decision on a pause was not made at the meeting. The next monetary policy meeting is scheduled for June 13-14, with CME Group's FedWatch Tool currently indicating an 87.1 percent chance the Fed will leave rates unchanged. On the sectoral front, oil service stocks extended the sell-off seen during trading on Tuesday, with a continued nosedive by the price of crude oil weighing on the sector. With crude for June delivery plummeting $3.06 to $68.60 a barrel, the NYSE Arca Oil Index tumbled by 2.2 percent to its lowest closing level in over a month. Substantial weakness also emerged among financial stocks, dragging the NYSE Arca Broker/Dealer Index and the KBW Bank Index down by 2.2 percent and 1.9 percent, respectively.


Crude oil futures ended deeply lower on Wednesday, magnifying their previous session's losses, after the U.S. Federal Reserve raised interest rates. Crude oil prices fell on concerns about economic growth and the outlook for energy demand as well as data showing an increase in gasoline inventories. Meanwhile, data released by Energy Information Administration (EIA) showed gasoline inventories rose by 1.7 million barrels last week compared to an expected drop of 1.2 million barrels. However, data showed that crude inventories dropped by 1.3 million barrels last week versus forecasts for a 1.1 million barrel drop. Benchmark crude oil futures for June delivery fell $3.06 or 4.3 percent to settle at $68.60 a barrel on the New York Mercantile Exchange. Brent crude for July delivery dropped $2.99 or 4 percent to settle at $72.33 a barrel on London's Intercontinental Exchange.


Indian Rupee ended higher against the US dollar on Wednesday tracking the weakness of the American currency in the overseas market. Sentiments were upbeat after data released by S&P Global showed that India's services sector surged in April as the sector's Purchasing Managers' Index (PMI) jumped to 62.0 from 57.8 in March. At 62.0, the services PMI is the highest in nearly 13 years. It has stayed above the key level of 50 that separates expansion in activity from a contraction for 21 months in a row. On the global front, Russian rouble climbed near to a one-month high against a globally weaker U.S. dollar on Wednesday, brushing aside a slide in oil prices as traders awaited two government debt auctions. Dollar fell on Wednesday, ahead of an expected rise in U.S. interest rates, and as gloomy jobs data, a standoff over the U.S. debt ceiling and nervousness following banking collapses clouded the investment outlook. Finally, the rupee ended at 81.81 (Provisional), stronger by 6 paise from its previous close of 81.87 on Tuesday.


The FIIs as per Wednesday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 10113.21 crore against gross selling of Rs 7121.48 crore, while in the debt segment, the gross purchase was of Rs 660.43 crore against gross selling of Rs 1695.73 crore. Besides, in the hybrid segment, the gross buying was of Rs 24.35 crore against gross selling of Rs 11.55 crore.


The US markets ended lower on Wednesday after the Federal Reserve hiked rates by another 25 basis points and investors' fears of contagion in the regional bank space returned. Asian markets are trading mostly in green on Thursday despite overnight fall on Wall Street. Indian markets ended lower on Wednesday amid concerns about interest rate hikes and the likely impact on global economic growth. Today, start of session is likely to be cautious tracking overnight losses on Wall Street post US Federal Reserve's 25 bps rate increase and hinted of a likely pause thereafter. Also, there may be some volatility in today's session ahead of weekly F&O expiry. Traders will be concerned with report that the Centre has advised states to be prepared for worst situation and ensure adequate availability of seeds for kharif sowing season in case of less rainfall, amid concerns over possible impact of evolving El Nino conditions on monsoon rains. Traders may take note of a report that India needs to introduce a broad-based carbon pricing system to meet its climate goals. The report also stated the need to bring about an effective green taxonomy so that sustainable green assets and activities can be identified and the potential risk of green washing can be limited. However, foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FII) bought shares worth Rs 1,338 crore on May 3, provisional data from the National Stock Exchange showed. Some support will come later in the day as a Ficci-EY report noted that the Indian media and entertainment (M&E) sector grew 20 per cent in 2022 to reach Rs 2.1 trillion, 10 per cent above its pre-pandemic levels in 2019. Meanwhile, a Reserve Bank report said India's green financing requirement is estimated to be at least 2.5 per cent of GDP annually till 2030. The country aims to achieve net zero emissions target by 2070. Stocks of airlines like IndiGo, SpiceJet, Jet Airways, are likely to be on investors radar for the second day running as crisis-hit Go First has reportedly stopped taking fresh bookings for its flights till May 15. The NCLT will hear the insolvency plea today. Besides, Adani Enterprises, Blue Star, Bombay Dyeing, Ceat, Dabur, HDFC, Hero MotoCorp, IDFC, J&K Bank, Mindspace Business Parks, Punjab Chemicals, Sundaram Fasteners, Tata Power, TVS Motor and United Breweries are few of the prominent companies scheduled to announce Q4 earnings later in the day.


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



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  • Tata Steel has reported fall of 84.08% in its consolidated net profit at Rs 1566.24 crore for Q4FY23 as compared to Rs 9835.12 crore for the same quarter in the previous year. 
  • NTPC has recorded 2.75 MMT of coal production during the month of April 2023 as compared to 1.11 MMT recorded for the month of April 2022, an over two-fold jump. 
  • JSW Steel's subsidiary -- JSW Steel USA Ohio has planned to invest $145 million in new projects to upgrade its manufacturing operations in Mingo Junction, Ohio. 
  • Infosys and SolarWinds have collaborated to advance the shift of SolarWinds solutions to a new SaaS model.
News Analysis