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NSE Intra-day chart (07 March 2017)
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Market Commentary 08 March 2017
Markets to get flat-to-mildly soft start

Indian benchmark indices, after hitting two-year closing highs in the previous session, ended lower on Tuesday as market participants remained wary over the latest tumult surrounding the Trump administration and geopolitical tensions emanating from North Korea. Traders were also grappled with the likelihood of an interest rate hike by the US Federal Reserve at its meeting next week. Sentiments remained subdued with Deputy Governor of the Reserve Bank of India's (RBI) statement that the impact of demonetisation on the informal sector is not fully captured in the GDP data and the effects of demonetisation is expected to spill over to certain segments of the economy in this quarter. However, he also said that the impact of the notes ban would only be temporary and would help in bringing informal sector into the mainstream economy. Investors got some comfort with the Global rating agency Fitch's report that Indian economy will grow by 7.1% in the current financial year before stepping up to 7.7% in the next two financial years. It said the December quarter GDP number suggests that economic activity was ‘hardly hit' by the cash crunch after the government's move to remove 86 per cent of currency in circulation overnight. Meanwhile, some Pharma stocks came under pressure on the report that growth of the domestic pharmaceutical industry is expected to remain moderate due to slowing growth in the US, increased regulatory scrutiny and consolidation of supply chain in the US market. In near term, the direction of markets will likely hinge on the results of the elections in Uttar Pradesh, due on Saturday, which will have a key influence on Prime Minister Narendra Modi's chances of clinching a second term in 2019. Finally, the BSE Sensex declined 48.63 points or 0.17% to 28999.56, while the CNX Nifty was down by 16.55 points or 0.18% to 8,946.90. 


The US markets closed lower on Tuesday, with the Dow and the S&P 500 logging their first back-to-back declines since late January, as sharp losses in energy and telecommunications sectors dragged on the broader market. On the docket are the all-important nonfarm payrolls data on Friday and two major central bank meetings from the European Central Bank on Thursday and the Federal Reserve next week. The market is pricing in a nearly 90% chance of an increase of benchmark interest rates when the Fed convenes its two-day meeting March 14-15. On the economy front, the US trade deficit shot up in January to a five-year high, underscoring the daunting problem faced by a Trump administration determined to reduce the gap. The trade deficit rose 9.6% to $48.5 billion in January from a revised $44.3 billion in December. The wider deficit was spurred by a 2.3% increase in imports of consumer goods such as cell phones from China and other countries. The Dow Jones Industrial Average lost 29.58 points or 0.14 percent to 20,924.76, Nasdaq was down 15.25 points or 0.26 percent to 5,833.93, while S&P 500 dropped 6.92 points or 0.29 percent to 2,368.39.


Crude oil futures continued their decline on Tuesday, even after OPEC Minister Mohamed Barkindo said January output cut compliance numbers are "very, very encouraging" and the commitment among output cut pact countries "remains high". Meanwhile, investors braced for a fresh batch of weekly data from the Energy Information Agency (EIA) due to be released on Wednesday. The EIA's report is expected to show a ninth straight weekly increase in U.S. crude inventories. Benchmark crude oil futures for May delivery was down by $0.06 or 0.13 percent to $53.14 on the New York Mercantile Exchange. In London, Brent crude for May delivery ended down by $0.10 at $55.90 on the ICE.


Indian rupee ended at four-month high against US dollar on Tuesday, due to selling of greenback by banks and exporters. This is the second consecutive session when the rupee is traded higher against dollar. Domestic currency got some support with the Global rating agency Fitch's report that Indian economy will grow by 7.1% in the current financial year before stepping up to 7.7% in the next two financial years. It said the December quarter GDP number suggests that economic activity was ‘hardly hit' by the cash crunch after the government's move to remove 86 per cent of currency in circulation overnight. On the global front, dollar steadied on Tuesday as investors widely expect the Federal Reserve to raise interest rates next week and are waiting for clues on the likely pace of hikes, including this week's US job data. Finally, the rupee ended at 66.67, 4 paise stronger from its previous close of 66.71 on Monday.


The FIIs as per Tuesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 8699.96 crore against gross selling of Rs 7859.04 crore, while in the debt segment, the gross purchase was of Rs 913.34 crore with gross sales of Rs 388.22 crore.


The US markets continued their weakness and ended lower for the second consecutive day in last session, partly due to profit taking and on concerns about the outlook for interest rates. Traders were also looking ahead to the Labor Department's closely watched monthly jobs report on Friday. The Asian markets have made a mixed start amid speculation the Federal Reserve is set to raise interest rates next week. Japanese market was down by around half a percent as the yen strengthened. The Indian markets witnessed some profit taking in last session, as traders turned cautious ahead of last phase of voting for Uttar Pradesh elections. Today, the start is likely to be flat-to-mildly soft on mixed global cues and the markets will continue consolidating. Though, some intraday spurt too can be seen and traders will be getting some support with Prime Minister Narendra Modi's statement that his government has been able to tame inflation which had gone out of control before 2014 and no political party could raise the issue during the polls in five states. PM cited examples of how different organisations around the world including the World Bank, IMF and others have appreciated the demonetisation move. Meanwhile, a key Parliamentary panel is likely to submit its report on the impact of demonetisation next month after reviewing various submissions, including by RBI Governor Urjit Patel. There will be buzz in the oil & gas sector stocks, as the government announced an open acreage licensing policy for oil and gas exploration, allowing bidders to carve out areas where they want to drill as the energy- hungry country looks at greater foreign investment to boost output. The pharma stocks will be under pressure with after US President Donald Trump's tweet about lowering drug prices. Trump said he was working on a new system to increase competition in the drugs industry and bring down prices. Traders will also be eyeing the primary market where the Avenue Supermarts' IPO will debut today.


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  • Mahindra & Mahindra has reported 1.22 % fall in its production to 44401 units in February 2017 as compared to 44950 units in same month last year.
  • Lupin has launched generic Paxil CR Extended Release Tablets USP, 12.5 mg, 25 mg and 37.5 mg having received an approval from the United States Food and Drug Administration.
  • BHEL and NEERI under Council of Scientific & Industrial Research signed a MoU for joint working on projects related to water and waste water treatment in the municipal segment.
  • Tata Motors has unveiled its first sports car, RACEMO, at the international motor show in Geneva on March 7, 2017.
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