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NSE Intra-day chart (07 February 2017)
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Market Commentary 08 February 2017
Markets to make a soft start on weak global cues

Tremors of earthquake of 5.8 magnitude, which hit Uttarakhand on Tuesday, was felt on Indian stocks market too, as the frontline benchmark indices slipped over quarter percent with investors remaining on the sidelines and refraining from any buying activity ahead of the Reserve Bank of India's (RBI) bi-monthly monetary policy committee meeting on Wednesday. RBI, in its sixth bi-monthly policy statement for the year, may have to delay the repo rate cut until a better picture emerges out of the remonetisation exercise. Sentiments remained downbeat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 403.52 crore on February 6, 2017. Besides, weakness in other Asian markets coupled with depreciation in rupee value against the dollar also spoiled sentiments. After rising for nine straight days, the rupee turned weak by 15 paise to 67.37 against the dollar on Tuesday on fresh demand for the American currency from importers. However, losses remained capped with commerce and Industry Minister Nirmala Sitharaman's statement that disbanding FIPB (Foreign Investment Promotion Board) will further improve ease of doing business and the respective regulators of the ministries concerned are ‘sufficient' to take care of investment proposals. The decision, the minister said, is in line with the government's policy for 'maximum governance and minimum government'. Some support also came with the report that the Centre is looking at developing economic corridors and planning to come up with logistic parks on national highways.  Meanwhile, some steel stocks came under pressure on report that the government would not extend protectionist minimum import price (MIP) on 19 colour-coated steel products. On the global front, Asian markets ended mostly lower on Tuesday as political and economic uncertainty sent investors sheltering in the Japanese yen and gold, while expectations China's foreign exchange reserves had fallen for a seventh month added to nervousness. Back home, finally, the BSE Sensex declined 104.12 points or 0.37% to 28335.16, while the CNX Nifty was down by 32.75 points or 0.37% to 8,768.30. 


The US markets closed slightly higher on Tuesday, with the Nasdaq notching a new record, while oil prices declined the US trade deficit hit its highest level in four years. The Federal Reserve (Fed) Bank of Atlanta slashed its forecast for first quarter (Q1) gross domestic product (GDP) growth in the US after the release of data last week. Specifically, the Atlanta Fed cut its US Q1 GDP growth estimate to 2.7%, from the prior forecast of 3.7% published on February 1. On the economy front, job openings were little changed in December, but hires continued a multi-month winning streak, as economic growth powers on. There were 5.5 million job openings on the last day of December. That was essentially flat compared to November. But 5.3 million people were hired during the month, up from 5.2 million in November. Fewer people quit jobs voluntarily in December - 3 million compared to 3.1 million in November. Consumer borrowing rose $14.2 billion in December, below expectations, as credit-card use increased at a much slower pace that in the prior month. Separately, the US trade deficit rose slightly in 2016 to $502.3 billion, marking the highest level in four years and underscoring the difficulty the Trump administration faces in bringing the nation's trade outlook back into balance. The Dow Jones Industrial Average added 37.87 points or 0.19 percent to 20,090.29, Nasdaq was up 10.67 points or 0.19 percent to 5,674.22, while S&P 500 gained 0.52 points or 0.02 percent to 2,293.08.


Crude oil futures slumped on Tuesday, slipping to their 3 week low, amid signs that robust U.S. shale production will help offset OPEC's supply cuts. Evidence of a burgeoning revival in US shale production could complicate efforts by OPEC and other producers to reduce a supply glut. Traders were eyeing the inventory data with expectation that US crude stockpiles rose 2.5 million barrels last week - a fifth straight weekly build - while gasoline inventories grew 1.1 million barrels - a sixth consecutive weekly build. Benchmark crude oil futures for March delivery declined by $0.84 or 1.6 percent to $52.17 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended lower by 0.67 or 1.2 percent at $55.05 on the ICE.


Indian rupee, snapping nine consecutive sessions winning streak, depreciated on Tuesday due to dollar demand from banks and importers amid continued capital outflows. Sentiments remained dampened with Commerce Minister Nirmala Sitharaman's statement that the proposed changes in the regime for issuing H-1B visas for skilled workers by the US government will have an impact on Indian companies and the Commerce Ministry will soon hold a meeting with the industry to discuss its strategy for dealing with it. Besides, losses in the equity markets along with dollar strengthens overseas too weighed on rupee sentiments. Meanwhile, traders remained cautious ahead of the Reserve Bank of India's (RBI) bi-monthly monetary policy committee meeting on Wednesday. On the global front, dollar shot higher against other major currencies on Tuesday, helped by hawkish comments from a Federal Reserve official who emphasized a March rate hike is possible. Finally, the rupee ended at 67.42, 20 paise weaker from its previous close of 67.22 on Monday.


The FIIs as per Tuesday'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 4126.79 crore against gross selling of Rs 4569.23 crore, while in the debt segment, the gross purchase was of Rs 3388.81 crore with gross sales of Rs 1077.49 crore.


The US markets made a modestly higher close in last session despite coming  well off their best levels of the day, the Nasdaq still reached a new record closing high in a positive reaction to the batch of largely upbeat quarterly results. The Asian markets have made a weak start with some indices witnessing cut of around half a percent in the early deals. The Japanese market too was trading lower after the yen reversed an early decline after the nation's central bank offered to buy bonds for the third time in a week. The Indian markets climbed down from their four months high in the last session ahead of the RBI's policy decision and on uncertainties over the timing of Federal Reserve rate hike in US. Today, the start of the crucial day is likely to be cautious and all eyes will be on Reserve Bank of India's monetary policy statement, slated to be announced later in the day. The central bank is expected to cut repo rate by 25 basis points on falling inflation and the government's fiscal prudence in Budget. Marketmen will also be getting some support with a private report stating that the global economic order is expected to shift from advanced to emerging economies over the next few decades, and by 2040 India could edge past the US to become the world's second largest economy in purchasing power parity (PPP) terms. There will be buzz in the India Inc on a report that concerns about protectionism in the US and Brexit in Europe are likely to make India a favourable destination for merger and acquisition (M&A) deals. There will be some action in PSU oil marketing companies, as global tumbled more than 1 per cent on Tuesday. There will be lots of important earnings announcements to keep the markets buzzing.



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  • Axis Bank has entered into partnership pact with Earthport Plc to enable faster outbound cross-border payments for its customers through Earthport's state-of-the-art global payments network.
  • Bajaj Auto has launched its BS-IV emission norm compliant 2017 edition of Pulsar RS200 and NS200 models priced up to Rs 1.33 lakh (ex-showroom Delhi).
  • Bharat Heavy Electricals has reported net profit of Rs 93.54 crore for the quarter ended December 31, 2016 as compared to net loss of Rs 1084.96 crore for the same quarter in the previous year.
  • HDFC Bank has sanctioned and disbursed various credit facilities aggregating to Rs 67.88 crore to CMI Energy India, the wholly owned subsidiary of CMI.
  • Tata Steel has reported consolidated net profit of Rs 231.90 crore for the quarter ended December 31, 2016 as compared to net loss of Rs 2747.72 crore for the same quarter in the previous year.
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