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NSE Intra-day chart (03 March 2017)
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Market Commentary 06 March 2017
Markets to make a positive start of the new week

Indian benchmark indices trimmed most of their losses, but failed to end the session on positive note, as traders remained cautious ahead of a speech by U.S. Federal Reserve Chair Janet Yellen, with expectations growing the Fed would raise interest rates soon. Several Fed officials have recently voiced their need for higher rates, which has seen the implied probability of a move this month shoot higher. On the domestic front, sentiments got hit by the GST Council deciding to peg the peak goods and services tax (GST) rate at 40% in the legislation instead of 28%, giving it the flexibility to raise rates without having to reach out to Parliament. Though, the change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28 percent agreed upon last year for the moment. However, investors were seen covering lot of short positions in late afternoon trades after some pessimism got petered out on the back of strong services PMI data. India's dominant services industry returned to growth in February for the first time in four months, as demand slowly recovers after the government's cash crackdown late last year. The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction. Some support also came with the report that the Competition Commission of India is assessing regulations across sectors in efforts to weed out 'obsolete regulatory restrictions' and improve the ease of doing business. Finally, the BSE Sensex declined 7.34 points or 0.03% to 28832.45, while the CNX Nifty was down by 2.20 points or 0.02% to 8,897.55. 


The US markets closed higher on Friday, extending weekly advance, as comments from Janet Yellen and other key Federal Reserve officials confirmed growing expectations of a March interest-rate increase. Fed-funds futures are now pricing in an 82% chance of a rate hike, according to CME FedWatch Tool. That probability was less than 20% only a week ago. Fed Chair Janet Yellen said that the Federal Reserve is set to raise its benchmark interest rate later this month as long as economic data on jobs and inflation holds up. In her comments, Yellen also said rates are likely to rise faster this year as the economy for the first time in her tenure appears clear of any imminent hurdles at home or abroad. On the economy front, the service side of the economy that employs the vast majority of Americans expanded in February at the fastest pace in a year and a half, another sign the US is growing at a steady clip early in the Trump administration. The Institute for Supply Management said its non-manufacturing index rose to 57.6% last month from 56.5% in January. The ISM production index for the service portion of the economy jumped 3.3 points to 63.6%, marking the highest rate since 2011 and the second highest level since 2004. The Dow Jones Industrial Average added 2.74 points or 0.01 percent to 21,005.71, Nasdaq was up 9.53 points or 0.16 percent to 5,870.75, while S&P 500 gained 1.2 points or 0.05 percent to 2,383.12.


Crude oil futures bounced back on Friday, ending higher despite data showing the U.S. oil rig count jumped to the highest in 17 months. Oil Services firm Baker Hughes revealed that the number of active US rigs drilling for oil rose by 7 to 609 rigs this week. It was the seventh straight weekly increase and added to concerns that record levels of US crude stockpiles may curtail OPEC's efforts to rebalance supply and demand in the industry.Traders got encouragement with big news from the Federal Reserve, as Fed Chair Janet Yellen and a number of colleagues signaled they are ready to raise interest rates. Benchmark crude oil futures for April delivery surged by $0.73 or 1.4 percent to $53.33 on the New York Mercantile Exchange. In London, Brent crude for May delivery ended higher by $0.78 at $55.86 on the ICE.


Indian rupee depreciated against the US dollar on Friday, due to fresh demand for the American currency from banks and importers. Traders remained cautious ahead of a speech by U.S. Federal Reserve Chair Janet Yellen, with expectations growing the Fed would raise interest rates soon. Investors failed to get solace with the report that the services sector bounced back to growth in February, after contracting for three months in a row, as businesses recovered from the demonetisation-related disruptions seen in each of the previous three months. The seasonally adjusted Nikkei Services Business Activity Index rose back above the 50.0 no-change mark in February, posting 50.3 from 48.7 in January. Besides, dollar held strong against other currencies overseas along with weak trade in domestic equity market also kept pressure on the local currency. Finally, the rupee ended at 66.81, 10 paise weaker from its previous close of 66.71 on Thursday.


The FIIs as per Friday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 5034.59 crore against gross selling of Rs 5010.38 crore, while in the debt segment, the gross purchase was of Rs 336.40 crore with gross sales of Rs 1109.86 crore.


The US markets made a modestly higher close in last session following a highly anticipated speech from Federal Reserve Chair Janet Yellen, which reinforced expectations that the Fed will raise interest rates at its next meeting later this month. The Asian markets have made a mixed start with some of the indices trading in red, the Japanese and Seoul market were lower as geopolitical risk increased after North Korea fired four ballistic missiles. The Indian markets despite some late hour recovery ended with modest cut in last session. Today, the start of the new week is likely to be in green and traders will be reacting to the developments of GST during the weekend. Moving a step closer towards implementing the goods and services tax (GST) from 1 July, the GST council approved two crucial supporting legislations of central GST law (CGST) and the integrated GST (IGST) law for this ambitious tax reform.  It will again meet on 16 March to clear the state GST law (SGST) and the union territory GST law (UTGST). Traders will also be getting some support with the news that foreign investments in the services sector increased 77.6 percent to USD 7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business. There will be some buzz in the IT sector, as the Industry body Nasscom has said that US decision to temporarily suspend the expedited premium processing of H-1B visas will lead to process delays for Indian IT firms too. However, Nasscom feels that the move will not be a "significant impediment" for the over $110 billion outsourcing industry. There will be some buzz from the primary market too where Music Broadcast, the operator of FM channel Radio City will launch its IPO to raise about Rs 489 crore. The company has fixed the price band of the issues at Rs 324-333 per share.


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  • Larsen & Toubro's construction arm -- L&T Constructions has bagged various orders worth Rs 2,170 crore under various business segments.
  • Tata Motors has decided to raise Rs 500 crore through private placement of non-convertible debentures.
  • ICICI Bank acting through its DIFC (Dubai) branch, priced an issuance of 5.5 year fixed rate notes for an aggregate principal amount of $300 million.
  • Wipro has entered into partnership with the University of North Texas at Dallas for the expansion of the Wipro Science Education Fellowship program in the United States.
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