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NSE Intra-day chart (06 May 2016)
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Market Commentary 06 May 2016
Markets to make a sluggish start on unsupportive global cues


After witnessing drubbing in the last three sessions, Indian benchmark indices witnessed a smart recovery in the second half on Thursday and ended the day in the green, however the trade remained volatile. Sentiments got a boost after Finance Minister Arun Jaitley stated that India's economic situation is by far the best in the world and the country has the potential to do even better. The minister enlightened that India is doing much better than other economics and has maintained 7.65% growth in FY16 Vs 7.2% in FY15 despite international headwinds. Besides, positive trend across the European peers and rise in the crude oil prices also supported the indices. However, investors also remained cautious with a private report stating that India's GDP is likely to 'auto correct', and the headline growth of the country in this fiscal is expected to remain flat at 7.4 per cent. According to the report, India's new GDP series seem to exaggerate the economy's true growth rate and this overestimation is likely to narrow over the next few quarters. On the global front, Asian markets ended mostly lower on Thursday, while the European stocks edged slightly higher in early trade. Back home, the local benchmark indices started the day on optimistic note on the back of value-buying by retail investors in beaten-down stocks. Sentiments got some support with report that India is considering setting up an independent panel to help state-owned banks negotiate settlements with big businesses on bad loans, in order to shield bankers from a populist backlash they say is hobbling efforts to clean up their balance sheets. Besides, recovery in Indian rupee too aided sentiments. Finally, the BSE Sensex ended at 25262.21, up by 160.48 points or 0.64%, while the Nifty ended at 7,735.50, up by 28.95 points or 0.38%.


The US market closed mostly lower on Thursday, with Dow closing little changed in green, as weak economic data, disappointing earnings and skittishness ahead of the closely watched employment report combined to weigh on investor sentiment. On the economy front, the number of Americans collecting unemployment benefits fell in late April to a nearly 16-year bottom, largely reflecting the low rate of layoffs taking place across the economy. Some 2.12 million people collected weekly unemployment benefits, known as continuing claims, in the seven days stretching from April 17 to April 23. The number of unemployment checks the government sends out has tumbled 82% after hitting a record 11.6 million in early 2010, when the US was in the early stages of a recovery following the Great Recession. The figure includes millions of people who received emergency benefits that are no longer available. The Nasdaq was down by 8.55 points or 0.18 percent to 4,717.09, S&P 500 dropped 0.49 points or 0.02 percent to 2,050.63 while Dow Jones Industrial Average was up 9.45 points or 0.05 percent to 17,660.71.


Crude oil futures despite paring early gains ended higher on Thursday, as dangerous wildfires threatened oil sands production in Canada. The crude prices witnessed wild swing during the trade on production worries as massive wildfires in Alberta headed south, forcing additional evacuations in Canada's sixth-largest province. Also, the stand-off in Libya impacted the nation's already depleted supply, providing short-term upside pressure for global oil prices. Benchmark crude oil futures for June delivery ended up by $0.56 or 1.28 percent to $44.34 a barrel after trading in a range of $43.97 and $46.02 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $45.02, up $0.40 or 0.90 percent on the ICE.


Indian rupee recovering from its early decline ended flat on Thursday. In early trade the rupee extended the losses amid fresh dollar demand from banks and importers.  However, the domestic currency erased all its early looses by mid of the day, tailing the gains in the local equity markets and on fresh dollar selling by exporters. The local equity markets despite coming off the day's high posted gains of over half a percent. On the global front, the US dollar rose against most of the other currencies, as mostly positive economic data released last day, boosted optimism over the strength of the economy and on hopes the US economy could bounce back from sluggishness of the first quarter. US services sector expanded in April as new orders and employment advanced. Finally, the rupee ended at 66.55, 1 paise stronger from its previous close of 66.56, on Wednesday.


The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 3719.36 crore against gross selling of Rs 3750.19 crore, while in the debt segment, the gross purchase was of Rs 876.90 crore with gross sales of Rs 823.88 crore.            


The US markets made almost a flat closing in last session, with tech heavy Nasdaq falling to its lowest closing level in almost two months. Traders seemed reluctant to make significant moves ahead of the monthly jobs report on Friday. The Asian markets have once again made a soft start, with some of the indices headed for the biggest weekly loss since February, led by the Japanese market which is down by around a percent, coming after a long break. The Indian markets bucking the global trend moved higher in last session, encouraged by the statement of Finance Minister that the country is much better placed than others. Today, the start is likely to be cautious as the global cues are not very supportive. Meanwhile, Finance Minister Arun Jaitley has said that the government is following the approach of 'Reform to Transform' through far-reaching structural reforms and has initiated several initiatives to boost investment climate and improve Ease of doing Business. Traders will be getting some support with the report that the country received $ 48 billion in remittances in the first nine months of the previous fiscal. India received $66.26 billion in 2014-15, while the amount was $ 65.48 billion in 2013-14. There will be some buzz in the markets with RBI issuing draft norms for on-tap licensing for universal banks. There will be some action in the export oriented stocks, as the government has eased norm for availing export benefits under Merchandise Exports India Scheme (MEIS). Exporters have been relieved from submitting the landing certificate of goods to avail benefits under the MEIS, a move aimed at facilitating ease of doing business. There will be some important earnings too, to keep the markets in action.


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  • Coal India is all set to establish 15 washeries across the country by October 2017, following which coal with more than 34% ash content will be washed and then supplied to consumers.
  • Wipro and Qlik have extended their partnership to a global alliance and will work together to offer advanced enterprise analytics solutions to joint customers across industry sectors.
  • HDFC, the country's largest mortgage lender, will be raising Rs 1,135 crore by issuing debentures.
  • Yes Bank, India's fifth largest private sector bank has been granted an in-principle approval by Securities and Exchange Board of India for acting as custodian of securities.
  • Bharti Airtel's arm Bharti Airtel International BV and Helios Towers Africa, have inked pact for the divestment of approximately 950 telecoms towers in the Democratic Republic of Congo from Airtel to HTA.
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