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NSE Intra-day chart (01 April 2016)
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Market Commentary 04 April 2016
Markets to get a green start; Manufacturing PMI data eyed


Profit booking coupled with sluggish global cues and caution ahead of key macro-economic data, weighed on the Indian benchmark indices on the first trading session of the new fiscal year 2016-17. Sentiments got undermined after government exceeded fiscal deficit target for the current financial year at the end of February but the final numbers for 2015-16 will be known once the March data is released. Further, investors turned jittery over the report that indicates the new fiscal (FY17) is likely to remain challenging for corporate India, with them unlikely to take up new investments on weaker credit conditions than in 2015-16. The report also believes the aggregate EBITDA levels of corporates will grow only modestly during 2016-17, given the budgetary focus on consolidation of fiscal deficit. However, the downside risks for the frontline indices was capped by reports that Infrastructure sector growth bounced back to a 15-month high in February, raising hopes of a pickup in industrial activity after three months of negative growth. The Index of Eight Core Industries, widely called the core sector index, was up 5.7% in February compared with 2.9% in the previous month and was the highest since 8.5% recorded in November 2014. On the global front, Asian markets ended in red on Friday, while European equities hit a one-month low on the first trading day of the quarter. Earlier on Dalal Street, the benchmark began the April month on a somber note, as investors remained largely influenced by the daunting sentiments prevailing in Asian markets. The key gauges made some attempts to claw back into the green zone in mid morning trades but profit booking at higher levels dragged the key indices to the lowest point in the session. However, late short covering in some blue-chip stocks ensured that local bourses go home with relatively small losses. Finally, the BSE Sensex declined by 72.22 points or 0.28% to 25269.64, while the CNX Nifty dropped 25.35 points or 0.33% to 7713.05.


The US market closed higher on Friday, as investors bet that a spate of strong economic data, including the March jobs report, won't speed up the pace of interest-rate increases by the Federal Reserve. A sharp drop in oil prices however pulled down the energy sector, capping the gains for the main benchmarks. The oil moved lower on comment from Saudi Arabian officials, that they would only freeze oil output if Iran and other major producers do so. The comments, along with reports that output from the Organization of the Petroleum Exporting Countries rose in March, pushed oil prices lower, dragging down the energy sector.  On the economy front, the US created 215,000 new jobs in March, showing an economy that's still expanding at a moderate pace despite some rocky moments earlier in the year. The unemployment rate rose a tick to 5% from 4.9%, as more people joined the labor force. Average hourly wages climbed 0.3% to $25.43. On the other hand, the rise in gas prices seems to have weighed on US consumers in March. The University of Michigan's consumer sentiment survey fell to a reading of 91 from 91.7 in February, marking the fourth monthly fall in a row. The Dow Jones Industrial Average added 107.66 points or 0.61 percent to 17,792.75, Nasdaq gained 44.69 points or 0.92 percent to 4,914.54 while, S&P 500 was up by 13.04 points or 0.63 percent to 2,072.78.


Crude oil futures suffered sharp decline on Friday on reports that Saudi Arabia will only freeze production at a closely-watched meeting this month if Iran decides to cap output as well. Mohammed Bin Salman, Saudi's deputy crown prince insisted that the kingdom will resist any agreement to cap its output unless the pact is also signed by their Iran. On the same time, although Iran has agreed to attend the OPEC-Non OPEC meeting later this month in Qatar, it is hesitant to limit production until it returns to pre-sanction levels from 2007. Benchmark crude oil futures for May delivery plunged by $1.55 or 4.04 percent to $36.79a barrel after trading in a range of $36.73 and $38.48 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $38.68, down $1.63 or 4.04 percent on the ICE.


Indian money markets remained closed on Friday due to bank holiday.


The FIIs as per Thursday's data were net buyers in equity and in debt segments both. In equity segment, the gross buying was of Rs 5927.44 crore against gross selling of Rs 4405.78 crore, while in the debt segment, the gross purchase was of Rs 2764.83 crore with gross sales of Rs 951.09 crore.         


The US markets bounced back and surged in last session, recovering from their early weakness due to crude decline; lifting Dow to its best closing level in almost four months, following the release of the Labor Department's closely watched monthly jobs report. The Asian markets have made mostly a positive start with traders in the region continuing to hope that the Federal Reserve will proceed cautiously on raising interest rates, despite some good economic data, though some of the important markets are closed for today. The Indian markets after a choppy trade ended with modest cuts in last session. Today the start of the crucial week is likely to be cautious but in green, tailing the gains in the regional peers. Traders will be closely eyeing the Reserve Bank of India's (RBI) monetary policy review slated to be announced tomorrow, which will determine the direction of the markets in the days ahead. Traders apart from the rate cut will be eyeing the statement of the RBI governor to gain insights into future rate cuts and liquidity. Meanwhile, there is some positive news that could cheer the markets, with the Climate Forecast System (CFS) of the Indian Institute of Tropical Meteorology (IITM) predicting mostly a normal and sometimes heavy rainfall across the country barring some parts. Traders will also be getting some encouragement with the report that after having revised upwards its target for indirect tax collections by 8.6 per cent for 2015-16, the government has crossed the revised estimate to collect Rs 7.09 lakh crore as per provisional estimates. Also, as per United Nations Industrial Development Organization (UNIDO), India has now been ranked sixth among the world's 10 largest manufacturing countries. Traders will also be eyeing the manufacturing PMI data scheduled for release later in the day. There will be some buzz in the PSU stocks, as the government this month will invite proposals from public sector undertakings for allotment of 16 coal mines.


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  • Maruti Suzuki India, country's largest car maker, has registered a rise of 15.9% in its total car sales for the month of March 2016 at 129,345 units, as against 111,555 units in March 2015.
  • Mahindra & Mahindra has reported its auto sales numbers which stood at 52,718 units during March 2016 as against 45,124 units during March 2015, representing a growth of 17%.
  • Bharat Heavy Electricals has successfully commissioned its fifth 500 MW set at Chandrapur Super Thermal Power Project in Maharashtra.
  • NTPC has commissioned Unit-1 of 250 MW of Bongaigaon Thermal Power Station on April 01, 2016. 
  • HCL Technologies, a leading global IT services company, is reportedly planning to acquire majority stake in Geometric through a share swap.
News Analysis