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NSE Intra-day chart (02 February 2017)
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Market Commentary 03 February 2017
Markets to make a mildly positive start


A session after showcasing a vivacious rally and amassing close to two percent, Indian benchmark indices consolidated on Thursday and ended the day with modest gains. The session was characterized by extreme volatility as the frontline indices went through a rollercoaster ride amid lack of direction and a pandemonium around global equity markets. Sentiments got some support from Niti Aayog vice-chairman Arvind Panagariya's expectation that the India's economic growth in the next fiscal year would be in the range of 7-7.5%. Furthermore, a private report also highlighting that India is expected to clock a GDP growth of 7.1% in 2017-18, up from 6.3% in 2016-17, as the country gets sufficiently remonetised and the schemes in the Budget play a supportive role. The uptick in the growth numbers would be largely driven by the remonetisation process which is expected by April end, as this in turn would boost the consumption levels in the country. Meanwhile, S&P Global Ratings said that Union Budget 2017-18 shows India's commitment to improve fiscal performance but heavy debt burden and weak public finances remain key rating constraints. Finance Minister Arun Jaitley has pegged the fiscal deficit for 2017-18 at 3.2%, down from 3.5% expected in the current financial year. On the global front, Asian equity markets ended mostly lower on Thursday, as the Fed reiterated its intention to lift rates gradually as the labour market tightens, acknowledging rising confidence among U.S. consumers and businesses. . On the BSE sectoral space, IT stocks recovered in today's trade, up 1.7% (IT index) after falling as much as 4% in the previous two sessions on visa concerns. Furthermore, oil & gas stocks extended their yesterday's gains as finance minister Arun Jaitley announced to create an integrated public sector oil major after merging the oil sector PSUs across the value chain in order to enhance their capacity to bear higher risks. The move will be positive for all public oil marketing companies (OMCs) and upstream companies. However, Auto stocks dropped after reporting lower January sales, with the BSE Auto index falling over 1%. Finally, the BSE Sensex gained 84.97 points or 0.30% to 28226.61, while the CNX Nifty was up by 17.85 points or 0.20% to 8,734.25. 


The US markets closed mostly lower on Thursday, as concerns about President Donald Trump's approach on foreign affairs amid spats with key allies and trade partners casted a pall over the market. The political actions appeared to command attention away from market fundamentals and the economy. On the economy front, the number of Americans who applied for unemployment benefits in the week stretching from January 22 to January 28 fell by 14,000 to 246,000, an extremely low level that might foreshadow another solid employment report in the first month of the New Year. New claims have tallied less than 300,000 for 100 straight weeks, a streak that last occurred in 1970. The economy had created more than 2 million jobs for six straight years, forcing many companies to scramble to find talented workers amid a shrinking pool of labor. The less volatile four-week average of initial claims, meanwhile, rose by 2,250 to 248,000. Continuing jobless claims declined by 39,000 to 2.06 million in the week ended January 21. Meanwhile, American companies and their workers were more productive in the fourth quarter, but labor costs rose at the fastest pace in 2016 in nine years, a potential warning sign for hiring and economic growth. Productivity increased at an annual 1.3% pace in the three months covering October to December. The Dow Jones Industrial Average lost 6.03 points or 0.03 percent to 19,884.91, Nasdaq was down 6.45 points or 0.11 percent to 5,636.20, while S&P 500 was up by 1.3 points or 0.06 percent to 2,280.85.


Crude oil futures turned lower on Thursday despite Saudi Arabia hiking the price it will sell crude oil to Asia more than expected. State-owned Aramco boosted its official pricing for Arab Light crude to Asia by 30 cents to 15 cents a barrel more than the regional benchmark. The Saudis want to increase revenues as they comply will supply cuts they agreed to in a deal between OPEC and Russia. Traders were eyeing the oilfield services firm Baker Hughes data on U.S. drilling activity at the end of last week on Friday. Benchmark crude oil futures for March delivery declined by $0.34 or 0.63 percent to $53.54 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended lower by 0.42 percent at $56.56 on the ICE.


Indian rupee ended eight-week high against dollar on Thursday, due to selling of greenback by banks and importers. This marked the seventh consecutive session for which rupee ended higher. Domestic currency remained in the positive territory as the US Federal Reserve decided to hold rates and struck a cautious tone about any future hike. Some support also came with Niti Aayog vice-chairman Arvind Panagariya's expectation that the India's economic growth in the next fiscal year would be in the range of 7-7.5%. Furthermore, a private report also highlighting that India is expected to clock a GDP growth of 7.1% in 2017-18, up from 6.3% in 2016-17, as the country gets sufficiently remonetised and the schemes in the Budget play a supportive role.  Finally, the rupee ended at 67.37, 10 paise stronger from its previous close of 67.47 on Wednesday.


The FIIs as per Thursday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5476.36 crore against gross selling of Rs 5401.58 crore, while in the debt segment, the gross purchase was of Rs 1230.55 crore with gross sales of Rs 416.34 crore.


The US markets made a flat closing in last session after showing a choppy trade amid uncertainty about monthly jobs report as well as the impact of President Donald Trump's policies. Traders largely overlooked the better first-time claims for U.S. unemployment benefits. The Asian markets have made a mixed start with Chinese market declining after resuming the trade from the long Lunar New Year holidays. China raised the interest rates in open-market operations. The Indian markets showed choppy trade after the big rally of budget day but managed to post gains of over a quarter percent in last session. Today, the start is likely to remain in green and the markets will be extending the gains. Traders will be getting some support with the American industry bodies lauding the Budget, saying Finance Minister Arun Jaitley has done an 'admirable job' in creating a vision that will propel the domestic economy while remaining cognizant about foreign investors eying the Indian market.  Also, the Economic Affairs Secretary Shaktikanta Das has said that the government is committed to fiscal prudence. So giveaways bordering on populism are something which the government does not believe in. Instead of giving out doles, the government believes in spending that money in productive sectors like infrastructure, consisting of the railways, the roads or irrigation. There will be buzz from the primary markets too where the BSE will be making its debut on NSE after its initial public offering of Rs 1,243 crore was subscribed some 51 times. There will be lots of important earnings announcements to keep the markets buzzing.



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Bank of Baroda






  • Mahindra & Mahindra has reported its auto sales performance for January 2017 which stood at 39,303 vehicles, a fall of 10%, compared to 43,789 vehicles during January 2016.
  • Hero MotoCorp has reported sales of 487,088 units for the month of January 2017, which is a substantial improvement from the December 2016 sales.
  • Tata Motors passenger and commercial vehicle total sales (including exports) in January 2017 were at 46,349 vehicles, a decline of 1% over 47,035 vehicles sold in January 2016.
  • Coal India has reported provisional production of 55.99 million tones in January 2017, as against a target of 61.04 MT.
  • Bajaj Auto has registered a fall of 18% in total sales to 2,41,917 units in January 2017 against 2,93,939 units in January 2016.
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