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NSE Intra-day chart (03 February 2017)
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Market Commentary 06 February 2017
Markets to start the new week on a positive note

Indian benchmark indices ended the range bound day of trade on a flat note with positive bias as investors preferred to stay on the sidelines ahead of the Reserve Bank of India's (RBI's) policy meeting next week. Sentiments got 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. However, investors remained cautious with the report that India's services languished, with new business orders falling for the third straight month, amid muted inflationary pressure that could offer RBI much room to remain accommodative in its next policy meet next week. The Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector companies on a monthly basis, came in at 48.7 in January, from 46.8 in December 2016. A reading above 50 indicates expansion while any score below the mark denotes contraction. Meanwhile, shares of public sector undertaking (PSU) banks extended their rally for the third straight trading sessions post Budget. Around six PSU banks, including Bank of Baroda, Bank of India, IDBI Bank, Indian Bank, Union Bank of India and Vijaya Bank have hit their respective 52-week highs on the in other wise range-bound market. On the other hand, auto stocks declined after the report that the automobile sales in January were a mixed bag in all segments, including passenger cars, two-wheelers and commercial vehicles, as rural markets have still not picked up. In scrip specific development, Sun TV Network hogged the limelight by gaining as much as 26% after a special CBI court on Thursday dropped all charges against former telecom minister Dayanidhi Maran and Sun TV promoter Kalanithi Maran in the Aircel-Maxis case. Also, shares of Bombay Stock Exchange (BSE) made a strong debut on Friday, with the scrip listing at Rs 1,085, a 35% premium over the issue price of Rs 806 on the NSE. The stock eventually settled the trade 33% higher at Rs 1,070 against its issue price. Finally, the BSE Sensex gained 13.91 points or 0.05% to 28240.52, while the CNX Nifty was up by 6.70 points or 0.08% to 8,740.95.


The US markets closed higher on Friday, with the Dow industrials reclaiming a close above 20,000 and the Nasdaq reached a record. Steps by President Donald Trump to roll back bank regulations and a stronger-than-expected January jobs report contributed to the upbeat sentiment. San Francisco Fed President John Williams said that the Federal Reserve can prepare to raise interest rates this year without knowing details of any new US fiscal policies because inflation is firming and the labor market looks good. Williams added that there is a lot of uncertainty around fiscal policy over the next two years. On the economy front, the US created 227,000 new jobs in January to mark the largest gain in four months, revealing an economy that still has plenty of vigor nearly eight years into a recovery that shows little sign of ending. Retailers, construction firms, financial companies and restaurants led the way in hiring in January. The increase in new jobs last month points to an economy that remains on a steady keel as the Trump administration gets underway. Growth has averaged about 2% a year since 2010, fueled by a surge in hiring that has reduced the unemployment rate near a nine-year low. The Dow Jones Industrial Average added 186.55 points or 0.94 percent to 20,071.46, Nasdaq was up 30.57 points or 0.54 percent to 5,666.77, while S&P 500 gained 16.57 points or 0.73 percent to 2,297.42.


Crude oil futures continued their upmove on Friday amid mounting tensions between the U.S. and Iran. Also there was some concern regarding tug of war between OPEC and non-OPEC nations regarding the global supply glut. Meanwhile, in retaliation for a recent ballistic missile test, the U.S. Treasury Department imposed a new wave of sanctions against Iran. Also, there was concern with oil services firm Baker Hughes reporting that the US rig count jumped for the 13th week in 14. Drillers added 17 rigs to 583, the most since October 2015. The number of gas-only rigs held steady at 145. This brings the total number of active oil and gas rigs to 729, an increase of 17.  Benchmark crude oil futures for March delivery declined by $0.29 or 0.54 percent to $53.83 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended higher by 0.44 percent at $56.81 on the ICE.


Extending gains for the eighth straight session, Indian rupee ended marginally stronger against dollar on Friday, due to selling of greenback by banks and importers. Local currency got 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. The domestic currency looked strong from the very beginning but losses in the equity market capped some rupee gains. On the global front, dollar gained against yen on Friday after the Bank of Japan offered to buy Japanese government bonds in a surprise operation aimed at bringing down JGB yields, as investors awaited US jobs data later in the day. Finally, the rupee ended at 67.31, 6 paise stronger from its previous close of 67.37 on Thursday.


The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5913.15 crore against gross selling of Rs 5193.20 crore, while in the debt segment, the gross purchase was of Rs 1271.68 crore with gross sales of Rs 1171.65 crore.


The US markets ended higher in the last session, supported by upbeat jobs data and the Dow climbed back above 20,000 and the Nasdaq reached a new record closing high. The Asian markets have made an all green start led by banks after the Trump administration planned to roll back financial regulations. The Indian markets after a choppy trade and remaining most of the day in red managed a flat but positive close in last session. Today, the start of the another crucial week likely to be in green amid positive global cues, however, the marketmen will be eyeing the Reserve Bank of India's (RBI) policy meeting on February 8, with hopes of a 25 bps rate cut. Traders are likely to get some support with Economic Affairs Secretary Shaktikanta Das' statement expressing confidence that the economy will grow upwards of 7 per cent next fiscal. He reiterated that there will be transient impact of demonetisation on the economy, but it will not spill over to the next fiscal. The Economic Affairs Secretary taking a dig at global rating agencies for failing to upgrade India's sovereign rating despite significant improvement in macroeconomic parameters, has said the agencies are several steps behind from reality and are missing out on something which only they can best explain. There will be some buzz in the financial stocks, on the reports that the government is likely to introduce a Bill for resolution of insolvent financial firms during the current session of Parliament in order to address the bankruptcy issue in the financial sector. The steel stocks too will be in action, as the Steel Minister Chaudhary Birendra Singh has said that the industry must gear up to face global competition as protectionist measures like minimum import price (MIP) and anti-dumping cannot continue indefinitely. There will be lots of result reactions based on earnings performance.


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  • Tata Power Company has acquired the Unattended Ground Sensors, the defence business division of NELCO.
  • Axis Bank has received an approval for allotment of 3 years Senior Floating Rate Notes aggregating to $10 million, under the Bank's MTN Programme through its Dubai International Financial Centre branch.
  • Tata Motors is all set to introduce a new brand called TAMO, which will incubate new technologies and make cars to meet expectations of consumers, as the Indian carmaker is aiming to future-proof its business.
  • Airtel Payments Bank, a subsidiary of Bharti Airtel, has opened over one lakh savings accounts in Uttar Pradesh within the first two weeks of its launch in the state.
  • Lupin has received final approval for its Triamcinolone Acetonide Cream USP, 0.025%, 0.1% and 0.5% from the United States Food and Drug Administration.
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