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NSE Intra-day chart (05 April 2017)
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Market Commentary 06 April 2017
Markets to make a somber start on weak global cues

Indian stock markets sustained the joy of closing in the positive territory for the second successive session on Wednesday after the frontline equity gained around quarter percent and settled at record closing highs. Sentiments got some support after government exceeded the tax collection estimates for 2016-17 fiscal at Rs 17.10 lakh crore, indicating that it should be able to meet the fiscal deficit target for the year. While direct tax mop-up during the April-March period grew 14.2% at Rs 8.47 lakh crore, indirect tax kitty swelled by 22% over last year to Rs 8.63 lakh crore. Some support also came with the report that department of Industrial Policy and Promotion (DIPP) and global think-tank OECD are jointly organising a seminar in Delhi to assess India's FDI regime and find ways to further improve the ease of doing business. The international seminar will also analyse the business climate in the country. However, many market participants remained on the sidelines and refrained from any buying activity ahead of the Reserve Bank of India's monetary policy statement due tomorrow. Rising interest rate in the US provides sufficient indication that benchmark policy rate of RBI is not going to go down but may increase in the future depending on domestic and external factors. However, investors are expecting the RBI to announce measures to absorb liquidity that has accumulated post demonetisation. Central bank Governor Urjit Patel in his last policy review on February 8 had kept the key interest rate on hold at 6.25%. Meanwhile, IT stocks came under pressure on the report that Trump administration has issued a stern warning to companies not to discriminate against American workers by misusing the H-1B work visas programme. In a fresh blow to Indian software professionals, the Trump administration has also moved to bar entry-level programmers from the H-1B visa programme. The BSE Sensex touched a high and a low of 30007.48 and 29817.69, respectively and there were 18 stocks on gainers side as against 12 stocks on the losers side on the index.


The US markets closed lower on Wednesday, suffering a late selloff after minutes of the Federal Reserve's March meeting showed policy makers plan to begin unwinding the central bank's gigantic balance sheet before the end of the year. Markets appeared to shrug off geopolitical news coming from North Korea, which launched another intermediate-range missile, and a chemical attack in Syria that left hundreds dead. The two-day summit between Trump and China's President Xi was still in focus for investors, who are looking for clues on ramifications for trade and the dollar. Meanwhile, the Federal Reserve released minutes from its March meeting, noting that most Federal Reserve policymakers think the central bank should take steps to begin trimming its $4.5 trillion balance sheet later this year as long as the economic data holds up. The minutes released of the March 14-15 policy discussion, at which the Fed voted 9-1 to raise interest rates, also showed that the rate-setting committee had a broad discussion about whether to phase out or halt reinvestments all at once. In the minutes, almost all policymakers agreed that the timing of a change in balance sheet policy would depend on economic and financial conditions and generally preferred to taper or stop investments in both Treasury and mortgage-backed bonds. The Dow Jones Industrial Average lost 41.09 points or 0.20 percent to 20,648.15, the Nasdaq was down 34.13 points or 0.58 percent to 5,864.48, while S&P 500 dropped 7.21 points or 0.31 percent to 2,352.95.


Crude oil futures though managed a positive close on Wednesday but came sharply lower from the day's high after a surprising build in U.S. oil inventories. A stronger dollar also weighed on commodities prices, as traders reacted to a very strong ADP private sector jobs report. Meanwhile, the Energy Information Administration (EIA) said inventories rose by 1.6 million barrels. Gasoline inventories fell by around 0.618 million barrels, while distillate stockpiles fell by 0.536 million barrels. The surprise build in U.S. crude stockpiles confounded expectations that U.S. demand for oil would start to pick up ahead of the 'summer driving season'. Benchmark crude oil futures for May delivery gained $0.09 or 0.17 percent to $51.12 on the New York Mercantile Exchange. In London, Brent crude for May delivery ended higher by $0.22 at $54.29 on the ICE.


Indian rupee ended stronger against the US dollar on Wednesday on the back of increased selling of the American currency amid continued foreign inflows. Local currency wiped off its early losses as sentiments turned optimistic with the government achieving the upward revised target of tax collection for FY17 and reporting a total tax collection of Rs 17.10 lakh crore during 2016-17 -- an increase of 18 percent over 2015-16 and the highest tax collection in last six years. However, traders remained cautious ahead of the Reserve Bank of India's Monetary Policy Committee meeting outcome on April 6, 2017, expecting it to maintain status quo on interest rates. On the global front, the dollar came under pressure after North Korea fired a ballistic missile into the sea ahead of a summit between US and Chinese leaders. Finally, the rupee ended at 64.87, 15 paise stronger from its previous close of 65.02 on Monday.


The FIIs as per Wednesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 3647.90 crore against gross selling of Rs 3063.50 crore, while in the debt segment, the gross purchase was of Rs 6054.67 crore with gross sales of Rs 639.45 crore.


The US markets closed marginally in red in the last session, though the major bourses traded with strength for most part of the day but came under pressure in afternoon trading, following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which revealed the central bank is ready to start shrinking their $4.5 trillion balance sheet this year. The Asian markets have made a soft start and many of the indices are down by over half a percent led by the Japanese market which is down by over a percent as the yen strengthened against dollar. The Indian markets despite a choppy trade posted gains in last session and the benchmarks ended at record closing highs ahead of the Reserve Bank of India's monetary policy review. Today, the start is likely to be cautious and somber, tailing weak global cues. All eyes will be on the Reserve Bank of India at its first bi-monthly monetary policy review of this fiscal, though general expectation are that it will keep interest rates unchanged, in view of inflation numbers but its statement will eyed. Meanwhile, global credit rating agency Crisil in its latest report has said that CPI inflation is likely to average higher at 5 percent in the current fiscal on expectations of increasing pressure on food prices as well as uptick in global oil and commodity rates. There will be negative reaction to a Sebi survey that more than 95 per cent Indian households prefer to park their money in bank deposits, while less than 10 per cent opt for investing in mutual funds or stocks. Some support to the markets can come with Finance Minister Arun Jaitley presenting the much-awaited Goods and Services Tax (GST) Bill for discussion and passage in Rajya Sabha on Wednesday. There will be some buzz in the steel sector stocks, as the Ministry of Steel is going to rank non-integrated secondary steel producers. The ranking will draw inspiration from the Smart City ranking approach that takes into account multiple factors.


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Reliance Industries





  • NTPC has commissioned Unit 2 of 250 MW of Bhartiya Rail Bijlee Company.
  • Cipla has received final approval for its Abbreviated New Drug Application for Abacavir and Lamivudine Tablets.
  • Reliance Industries has received environment clearance for expansion and debottlenecking of its Dahej petrochemical facility in Gujarat.
  • Yes Bank has reported $1 billion on its balance sheet at the IFSC Banking Unit in Gujarat International Finance Tec City as on March 31, 2017.
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