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NSE Intra-day chart (07 April 2016)
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Market Commentary 08 April 2016
Markets to make another cautious start on sluggish global cues


Caution ahead of the quarterly results season, along with relentless selling by foreign funds, dragged the Indian equity markets lower and benchmarks deposed around a percentage point on Thursday. Sentiments were dampened since beginning of trade as traders remained on sidelines ahead of January-March earnings reports amid worries companies continued to suffer due to lacklustre economic growth and weak global demand. A sluggish quarter could hit sentiment further after the Reserve Bank of India failed to impress markets on Tuesday by cutting interest rates by 25 basis points, as some had hoped the central bank would act more boldly. Investors failed to get any sense of relief  with industry body CII terming the GDP calculation methodology an ‘imprecise science' and pegging the country's economic growth at around 8 per cent for the current fiscal, higher than the RBI's projection of 7.6 per cent. Markets participants also shrugged off ratings agency Moody's statement that India's rising foreign direct investment provides stable financing of its current account deficit and is a credit positive, implying that it would count positively towards a ratings upgrade at the time of the review. On the global front, Asian markets ended mostly in green on Thursday after Federal Reserve meeting minutes reaffirmed that US policy makers aren't in a rush to raise interest rates, while European shares were slightly higher in early deals. Back home, after getting positive start, Indian benchmark indices immediately slipped into negative territory and extended their losses in late morning session, lacking any significant upside cues. Sentiments remained down-beat with report that foreign portfolio investors (FPIs) sold shares worth a net Rs 493.6 crore on April 06, 2016. However, the frontline indices tried to pare the early losses and crawled towards the neutral line in noon trade, but could not succeed as selling pressure accentuated in the late afternoon trades as investors took to across the board risk aversion. Finally, the BSE Sensex declined by 215.21 points or 0.86% to 24685.42, while the CNX Nifty dropped 67.90 points or 0.89% to 7,546.45.


The US market closed lower on Thursday, as investors shunned assets perceived as risky in favor of haven plays. Concerns about global economic growth have ratcheted up investors' appetite for haven assets such as the yen and gold. A drop in oil prices after two days of gains dented the appetite for risk assets as investors weighed a fall in crude inventories against fading hopes that a meeting of oil producers will lead to a curb on output. Federal Reserve Chair Janet Yellen touted the strength of the United States economy, rebuffing political rhetoric suggesting a bubble is ready to burst. On the economy front, the number of Americans who applied for unemployment benefits last week from March 27 to April 2 fell by 9,000 to 267,000, keeping initial claims near the lowest level in decades. The average of new claims over the past four weeks, a less volatile measure, rose by 3,500 to 266,750. Initial claims have been below the 300,000 threshold for 57 weeks, a clear sign the labor market remains sound despite slower US economic growth since last fall. The Dow Jones Industrial Average lost 174.09 points or 0.98 percent to 17,541.96, Nasdaq was down by 72.35 points or 1.47 percent to 4,848.37 while, S&P 500 dropped 24.75 points or 1.20 percent to 2,041.91.


Crude oil futures decline on Thursday, erasing some of the massive gains gathered in previous session. Traders reacted to reports of a considerable inventory build at the Cushing Oil Hub and an unexpected increase among exports in Iraq. The Iraqi state-run South Oil Company said that exports from the nation's Southern Iraq port increased to 3.494 million bpd for the first week of April. Benchmark crude oil futures for May delivery declined by $0.48 or 1.27 percent to $37.27 a barrel after trading in a range of $36.70 and $38.29 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $39.45, down $0.39 or 0.98 percent on the ICE.


Indian rupee, snapping its two day's depreciating streak ended substantially stronger on Thursday on fresh selling of American currency by banks and exporters, tracking gains in its Asian peers. Besides, the dollar's weakness against some currencies overseas too supported the rupee. Further, some support came with industry body CII pegging the country's economic growth at around 8 per cent for the current fiscal, higher than the RBI's projection of 7.6 per cent. However, losses in domestic equity market restricted rupee's gain. On the global front, yen was higher against greenback on Thursday, after minutes of the Federal Reserve's meeting last month underscored its caution about future interest rate hikes. Finally, the rupee ended at 66.46, 20 paise stronger from its previous close of 66.66 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 2649.87 crore against gross selling of Rs 3164.82 crore, while in the debt segment, the gross purchase was of Rs 1140.22 crore with gross sales of Rs 1409.33 crore.          


The US markets closed lower in last session, offsetting the strength seen in the previous session. The weakness on Wall Street is partly due to a pullback by the price of crude oil and traders shrugged off a report from the Labor Department showing a bigger than expected drop in initial jobless claims. The Asian markets have made a weak start tailing the decline in the US markets and most of the indices in the region are witnessing cuts of over half a percent in early deals. The Indian markets after moving in a range lost their way completely and lost close to a percent in last session. Today, the start is likely to remain cautious on sluggish global cues, however some recovery too can be expected in latter trade and traders are likely to get some encouragement with global rating agency Moody's Investors Service's latest report stating that low commodity prices and better FDI inflows have reduced India's vulnerability to external shocks which is 'credit positive' for India. It also said that India's external financing needs have diminished significantly over the last three years. Though, there will be cautiousness too with the Reserve Bank of India (RBI) in a report stating that India`s power reforms are likely to put pressure on state governments' budgets, potentially forcing them to cut spending needed to support economic growth. Meanwhile, India has offered its commitments on opening goods and services sectors in the Regional Comprehensive Economic Partnership (RCEP) negotiations, a a mega trade agreement which is being negotiated among 16 countries including 10 ASEAN members. The power stocks will be buzzing on reports that the Directorate of Revenue Intelligence (DRI) is probing over-valuation of coal imports by power companies.


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Tata Motors






  • Tata Motors has launched its cool new hatchback, the TIAGO with cutting edge design, technology and driving dynamics to create new segment benchmarks in the industry.
  • The Centre's green panel has given clearance to Tata Steel for diversion of about 199 hectare of forest land for expansion of its iron ore mining project in Keonjhar district, Odisha.
  • ITC and Starwood Hotels and Resorts have extended their existing partnership for 11 ITC Luxury Collection hotels and one hotel under the Sheraton brand.
  • HDFC Bank, the country's second largest private sector bank has signed a memorandum of understanding with the Indian Navy to offer Salary account to Navy personnel.
  • Bharat Heavy Electronics has commissioned an all-time high power generation capacity of over 15,000 MW and booked new orders worth Rs 43,727 crore in 2015-16, the largest in five years.
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