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NSE Intra-day chart (07 January 2016)
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Market Commentary 08 January 2016
Markets to see some bounce back after four days of losses

It turned to be yet another tumultuous day of trade for the Indian stock markets which got thrashed for the fourth straight session to end with a cut of over two percent. Markets saw relentless selling pressure across the counters after further depreciation of the Chinese yuan rekindled fears of a growth slowdown in the world's second largest economy while slump in crude oil prices also dampened sentiment. The global benchmark Brent fell over 3 per cent to $33 per barrel, a level not seen since April 2004 and below the previous 11-year low. Finally the NSE's 50-share broadly followed index Nifty, suffered a nasty one hundred and seven point laceration to settle below the crucial 7,600 support level while Bombay Stock Exchange's Sensitive Index Sensex got obliterated by over five hundred points and closed just above the psychological 24,850 mark. Moreover, the broader markets too failed to show any kind of fervor and settled with large cuts of about three percent. Sentiments remained down-beat with the World Bank lowered its global economic growth forecast for 2016 to 2.9% against its June forecast of 3.3% growth because of sluggish performance from major emerging market economies. On the domestic front, sentiments got undermined with the report that Indian companies raised the lowest amount via both onshore and offshore debt markets in six years last year owing to subdued domestic investment climate and volatile global markets. Earlier on Dalal Street, the benchmark got off to a somber opening, extending the downtrend for the fourth straight session as pessimistic sentiments prevailed across Asian markets. Thereafter, the frontline indices lost the plot and kept tumbling down the hill without any stoppage. The steep fall turned even acute after the weak opening of European markets in the noon trades. The indices barely managed to show signs of stabilizing in the session as the downward drift halted only with the session's close after suffering gargantuan losses. Finally, the BSE Sensex declined by 554.50 points or 2.18% to 24851.83, while the CNX Nifty lost 172.70 points or 2.23% to 7,568.30.

The US markets tumbled again on Thursday with the major averages coming down to their worst closing levels in three months. The fall was induced by another sell-off in the Chinese market, which plunged by more than 7 percent in brief trading after the People's Bank of China set the yuan's daily reference rate at the lowest level since April of 2011. Traders even overlooked the Labor Department report showing a pullback in initial jobless claims in the week ended January 2nd.The report said initial jobless claims fell to 277,000, a decrease of 10,000 from the previous week's unrevised level of 287,000.  Now all eyes are on closely watched monthly employment report to be released on Friday. The Dow Jones Industrial Average plunged by 392.41 points or 2.3 percent to 16,514.10, the Nasdaq slumped by 146.34 points or 3 percent to 4,689.43 and the S&P 500 tumbled 47.17 points or 2.4 percent to 1,943.09.

Crude oil futures falling for the fourth day in a row plunged to near the 2004 lows on dismal news from China, a variety of geopolitical tensions and brimming oil supplies. The sell-off in China exacerbated fears of weakening demand among the world's second-largest consumer of oil, even though the US Energy Information Agency reported an unexpected decline in US inventories. The report showed that the US crude oil inventory fell by 5.1 MMbbls to 482.3 MMbbls for the week ending January 1, 2016, as compared with the previous week. Benchmark crude oil futures for February delivery shed $0.70 or 2.02 percent to close at $ $33.27 a barrel after trading in a range of $ $34.26 and $ $32.10 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for February delivery declined by $0.48 or 1.46% to $ $33.75 a barrel on the ICE.

Indian rupee extending weakness for the second day declined on Thursday, after the Chinese central bank, PBoC, devalued yuan by 0.51 per cent and set it midpoint to its weakest level since March 2011, sending Asian currencies tumbling. Besides, sustained foreign fund outflows amid increased demand for the US currency from importers and sharp decline in the local equity markets, also weighed on the rupee sentiments. On the global front, yen rose to its highest against the dollar in more than four months as investors looked for a haven after China guided the yuan aggressively lower. Finally, the rupee ended at 66.93, 10 paise weaker from its previous close of 66.83 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 4454.10 crore against gross selling of Rs 4567.79 crore, while in the debt segment, the gross purchase was of Rs 287.57 crore with gross sales of Rs 1100.69 crore.  

The US markets ended sharply lower in last session on growing Chinese fear and oil prices dropping to 12-year lows. Investors also braced for Friday's US government jobs report and remained on sideways. Some of the Asian markets have extended losses at their weakest level since September as the crude oil lingered around a 12-year low, though many are showing signs of recovery, as the Chinese markets bounced back in early trade. The Indian markets embroiled in global rout slumped in last session with major averages closing at their three weeks low, Sensex even slipped below the 25000 crucial mark, markets after a gap-down opening kept plummeting lower throughout the day with most of the bluechip companies witnessing pounding. Today, the start is likely to be cautious but recovery can be expected along with other global peers. On domestic front the government has said that it agreed to accept demands set by the Congress party to back a landmark tax reform, raising hopes a political standoff that blocked the measure throughout last year might be resolved. Also, as the Finance Minister Arun Jaitley during his fourth Pre-Budget Consultative Meeting with the representatives of IT (Hardware & Software) Sector said that Indian economy has emerged as one of the fastest growing economies in the world with its GDP growth accelerated at 7.3 percent in 2014-15 compared to 6.9 per cent growth in 2013-14 and 5.1 per cent in 2012-13, indicating that the economy is firmly on the path of economic revival. Meanwhile, in a pre-Budget meeting with the commerce and industry ministry, India Inc has said that the government should further ease Foreign Direct Investment (FDI) norms, especially in sectors such as multi-brand retail, education and e-commerce, where its stance has been ambivalent till now. Some buzz can be seen in the PSU stocks, as the finance ministry has asked Central Public Sector Enterprises (CPSEs) to shell out 30% dividend to the government, and that CPSEs with large cash reserves and sustainable profit may issue bonus shares. 

Support and Resistance: NSE Nifty and BSE Sensex


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Tata Motors





  • Tata Power has signed a pact with International Union for Conservation of Nature to delineate & enhance conservation of ecological footprints in the locations of the various companies' projects.
  • Bharat Heavy Electricals has commissioned two 220/20kV substations in Afghanistan. The project has been executed by BHEL on EPC basis.
  • Maruti Suzuki's DZire, India's best-selling sedan, now comes equipped with the celebrated Auto Gear Shift technology.
  • Bajaj Auto, one of the leading two wheeler makers in India, is planning to enter 12 new export markets by end of March 2016.
  • Tata Motors in association with Petronas Lubricants International have unveiled Tata Motors Genuine Oil for its passenger vehicles range in India.

News Analysis