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NSE Intra-day chart (04 February 2016)
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Market Commentary 05 February 2016
Markets to get a cautious start on mixed global cues

Indian equity benchmarks snapped three-day losing streak as investors opted to buy beaten down but fundamentally strong stocks amid positive global cues. It was a volatile session of trade for Indian equity markets where domestic gauges started with a gap-up opening and traded with traction in early deals as traders took some relief with Finance Minister Arun Jaitley amid global uncertainty saying that it is important for India to emerge out of the crisis stronger as it is on a much higher and stabler footing than other nations. Jaitley said that India is ‘relatively unimpacted' by some of the factors that have caused the global crisis.  However, markets pared most of their gains in second half of trade after reports stated that the US government has made it mandatory for all active pharmaceutical ingredients (APIs) to be manufactured locally. But, domestic gauges regained momentum in dying hours and ended the session with a gain of over half a percent with frontline indices recapturing their crucial 7,400 (Nifty) and 24,300 (Sensex) levels. Global cues remained supportive with European counters making a firm opening, while Asian markets too ended mostly in green. Closer home, appreciation in Indian Rupee too aided sentiments. Buying was witnessed in metal counter as traders went for short covering. Moreover, copper prices rose in global commodities markets too helped some stocks in the space. Shares of oil exploration and production companies edged higher on gain in crude oil prices. On the flip side, pharmaceutical stocks remained under pressure after the United States government reportedly made it mandatory for Active Pharmaceutical Ingredients to be manufactured locally. Aviation stocks tumbled after sharp rebound in crude oil prices. Finally, the BSE Sensex surged by 115.11 points or 0.48% to 24338.43, while the CNX Nifty gained 42.20 points or 0.57% to 7404.00.


The US markets closed higher on Thursday, led by advances in the materials and industrials sectors. Wall Street shares tracked fluctuations in crude-oil prices throughout much of the day, pushing stocks in and out of positive territory. On the economy front, initial jobless claims rose in the last week of January but remained at a very low level, suggesting the labor market is still sound despite a rocky start to 2016 for the US economy. New claims rose by 8,000 a seasonally adjusted 285,000 in the seven days stretching from January 24 to January 30. The four-week average of initial claims increased by 2,000 and stood at 284,750. On the other hand, the productivity of US businesses fell at a 3% annual pace in the fourth quarter, marking the biggest decline in almost two years. Weak productivity growth has been a hallmark of the near-seven-year economic recovery. Productivity increased just 0.6% in 2015, less than one-third the average since the end of World War II. The Dow Jones Industrial Average added 79.92 points or 0.49 percent to 16,416.58, the Nasdaq was up 5.32 points or 0.12 percent to 4,509.56 while the S&P 500 gained by 2.92 points or 0.15 percent to 1,915.45.  


Crude oil futures gave up some gains on Thursday after a choppy trade, with traders gauging the likelihood of a potential extraordinary OPEC meeting later this month. While numerous reports have surfaced that Saudi Arabia and Russia are considering an agreement in which the two oil producers could cut daily production by as much as 5%. However, any production cuts by OPEC will require the approval of Saudi Arabia, the world's largest exporter and the Saudi kingdom has given no indication that it could be interested in appearing at the emergency meeting. Benchmark crude oil futures for March delivery ended down by $0.65 or 2.00 percent to $ 31.62 a barrel after trading in a range of $31.54 and $33.59 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $34.35, down $0.68 or 1.95 percent on the ICE.


Snapping its three-day losing streak Indian rupee bounced back against dollar on Thursday on heavy selling of dollar by banks and exporters. The domestic currency looked strong from the very beginning and was also supported by the gains in equity markets, which despite some choppiness managed a positive close. Besides, the dollar's weakness against some currencies overseas supported the rupee. The sentiments were on optimistic note as Finance Minister Arun Jaitley expressed the hope of passage of the Constitutional Amendment Bill for the Goods and Services Tax and the Insolvency Code in the forthcoming Budget Session of Parliament. On the global front, euro hit a 3-1/2 month high, extending its gains from an explosive sell-off a day earlier.  Finally, the rupee ended at 67.56, 51 paise stronger from its previous close of 68.07 on Wednesday.


The FIIs as per Thursday's data were net sellers in equity and in debt segments both. In equity segment, the gross buying was of Rs 3178.36 crore against gross selling of Rs 3495.69 crore, while in the debt segment, the gross purchase was of Rs 791.53 crore with gross sales of Rs 1316.79 crore.     


The US markets ended the choppy session on modestly positive note, as traders kept a close eye on the price of crude oil, which showed some wild swings as the day progressed, while traders were reluctant to make any significant moves ahead of the release of the Labor Department's monthly jobs report on Friday. The Asian markets have made a mixed start, with some of the indices trading in red led by Japanese market which has lost over a percent after the yen strengthened against the dollar which was down on bets that the Federal Reserve will hold interest rates unchanged this year. The Indian markets despite some late hour choppiness managed a positive close, ending higher by around half a percent in last session. Today, the last day of the week is likely to see a cautious but positive start, as the global cues are mixed and traders will prefer to remain on sidelines ahead of US employment data, also as the crude after a day of surge has lost momentum. There will be some cautiousness with a survey conducted by the Reserve Bank of India stating that Indian households expect inflation at over 10 percent in the year ahead, twice as much as RBI's retail inflation target of 5 percent by March 2017. In general, a majority of the respondents expect prices to increase over the next three months and a year ahead. However, there will be some support to the markets with foreign direct investment (FDI) in the country more than doubling to about $ 4.5 billion in December 2015. In December 2014, India had received $2.16 billion. There will be some somberness in the IT sector stocks, with industry lobby group Nasscom reporting that Indian IT services exports are likely to grow at a slower pace next fiscal year than in the recent past as global clients rein in technology spending. There will be lots of earnings announcements too, to keep the markets in action.


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Tata Steel





  • Maruti Suzuki India, India's leading passenger vehicle manufacturer, has unveiled Concept Ignis and Concept Baleno RS on the second day of Delhi Auto Expo 2016.
  • Tata Power's Joint Venture has commissioned two units of 60 MW each of its 120 MW Itezhi Tezhi hydro Power Project in Zambia.
  • Bajaj Auto has reported 4.67% rise in its net profit at Rs 901.49 crore for the quarter ended December 31, 2015 as compared to Rs 861.24 crore for the same quarter in the previous year.
  • Hindustan Unilever, one of the leading FMCG firms, is planning to enter into spices and seasoning mixes segment under the Knorr brand.
  • Hero MotoCorp has unveiled an exciting new range of products and concepts at the Auto Expo The Motors show 2016, which include Splendor iSmart 110cc, Xtreme 200S, XF3R, Duet-E.
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