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NSE Intra-day chart (07 June 2016)
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Market Commentary 08 June 2016
Markets to get a cautious start on mixed global cues


Indian stock markets witnessed mostly a stable day of trade on Tuesday, as investors remained optimistic after RBI Governor Raghuram Rajan's accommodative policy stance and US Federal Reserve Chair Janet Yellen's comments.  Sentiments got some support with India Meteorological Department's (IMD) statement that the Southwest monsoon is 'very likely' to hit Kerala on June 9 following favourable conditions. The weather office has forecast rain at a few places in South Tamil Nadu and over one or two places in the northern parts of the state for the next 48 hours. Besides, appreciation in the rupee against dollar too supported sentiments. Indian rupee strengthened by 21 paise to 66.75 at the time of equity markets closing on sustained selling of dollar by banks and exporters amid strong foreign fund inflows. Some support also came with a private report that India's economic growth is expected to accelerate to about 8.1 per cent in the current financial year on the back of better monsoon prospects and growth in consumption demand. Meanwhile, financials were among the top gainers with State Bank of India (SBI) up over 5.4 percent after the RBI kept key policy rates unchanged.  FMCG counter witnessed hefty buying on hopes that above normal monsoon would boost rural volumes, While some good buying also witnessed in mining and metal stocks amid a global rally in base metal prices after the US dollar fell to a three-week low against a basket of global currencies. On the global front, Asia markets ended mostly in green, while European Markets traded on firm note in early trade. Back home, the benchmark got off to a promising start as investors largely remained influenced by encouraging global developments and up-move in Asian markets after comments from Fed Chair Janet Yellen remained positive on the economy. Even through the frontline indices traded in tight range in morning deals ahead of the RBI's second bi-monthly policy meet this fiscal, the indices managed to gradually gain traction in the second half of trade. Finally, the BSE Sensex gained 232.22 points or 0.87% to 27009.67, while the CNX Nifty rose 65.40 points or 0.80% to 8,266.45.


The US markets closed mostly higher on Tuesday, propelled by a sharp rally in the energy sector. However, a slump in biotech weighed on the Nasdaq Composite, dragging it into negative territory. Investors appeared to shrug off government data that showed productivity of businesses and workers fell in the first quarter, but by less than initially reported. The productivity of American businesses and workers fell in the first quarter at a slower pace than previously reported, though the weak long-term trend remains a nagging problem for the US economy. Productivity declined at a 0.6% annual rate in the first three months of the year instead of the initial 1% estimate. Productivity has fallen in four of the past six quarters. The Dow Jones Industrial Average was up by 17.95 points or 0.10 percent to 17,938.28, S&P 500 added 2.72 points or 0.13 percent to 2,112.13 while, Nasdaq lost 6.96 points or 0.14 percent to 4,961.75.


Nymex crude oil futures surged on Tuesday, hitting their 2016 highs and settling above $50 a barrel the first time in almost a year, brent too climbed above $51 for first time since October. Prices rose on expectations of domestic stockpile draws and worries about global supply shortfalls from attacks on Nigeria's oil industry. Earlier, the industry group Genscape reported a drawdown of 1.08 million barrels at the Cushing, Oklahoma delivery point for WTI futures during the week to June 3. Meanwhile, Nigeria oil minister Emmanuel Ibe Kachikwu announced that president Muhammadu Buhari's national security team had initiated discussions with the militant group in an effort to slow the rate of attacks. Benchmark crude oil futures for July delivery inched up by $0.67 or 1.4 percent to at $50.36 a barrel after trading in a range of $49.45 and $50.41 a barrel on the New York Mercantile Exchange. In London, Brent crude for July delivery closed at $51.44, up $0.89 or 1.8 percent on the ICE.


Rising for the fourth straight day, Indian rupee ended stronger against dollar due to sustained selling of American currency by banks and exporters. Further, smart rally in domestic equity market also supported sentiment. Besides, investors got support with the assurance of Reserve Bank of India (RBI) that it would provide dollar and rupee liquidity if needed to prevent any disruption in the markets on the redemption of foreign currency non-resident (FCNR) deposits. Meanwhile, RBI in its bi monthly monetary policy review left its key policy rate unchanged. The central bank left its benchmark repo rate unchanged at 6.50%. On the global front, dollar was moderately higher against the yen on Tuesday, after selling overnight on Federal Reserve Chairwoman Janet Yellen's closely-watched speech which kept investors cautious regarding the possibility of a summer interest rate hike. Finally, the rupee ended at 66.78, 22 paise stronger from its previous close at 67.00 on Monday.


The FIIs as per Tuesday's data were net buyers in equity and debt segments both. In equity, the gross buying was of Rs 5078.16 crore against gross selling of Rs 5012.95 crore, while in the debt segment, the gross purchase was of Rs 1323.54 crore with gross sales of Rs 1257.93 crore.            


The US markets extended the gains in last session, though they gave up most of the early gains, assessing Federal Reserve Chair Janet Yellen's remarks on Monday. There was some cautiousness with a Labor Department report showing that labor productivity declined, though less than initially estimated in the first quarter. The Asian markets have made a mixed start and some of the indices are in red, Japanese market has declined as yen rose, while the Chinese market was down ahead of the trade data that's forecast to show declines in shipments both in and out of the nation. The Indian markets picked up pace in second half of the last session and posted decent gains after RBI in spite of maintaining a status quo hinted accommodative policy stance. Today, the start is likely to be cautious tailing the mixed cues from the global markets. There will be concern in the market with crude oil trading above $50 a barrel. Also, the World Bank has slashed global growth outlook for 2016 to 2.4 per cent from 2.9 per cent, citing sluggishly low commodity prices, uncertain capital flow and lukewarm demand in advanced economies. However, markets may get some support with the government pitching for a ratings upgrade with global agency Fitch Ratings citing improvement in macroeconomic conditions and it's commitment to fiscal consolidation. Fitch Ratings had in December affirmed India's 'BBB-' rating with a stable outlook. Meanwhile, another global rating agency, Moody's Investors Service has said that with the Reserve Bank of India (RBI) not altering policy rates, it will be only the transmission of monetary policy that would influence India's economic development and credit profile. There will be some buzz in the services related companies on reports that the government is working to significantly liberalize its visa regime, including allowing multiple-entry tourist and business visas, as part of an effort to increase its services exports.


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Tata Motors





Axis Bank






  • ICICI Bank is planning to raise Rs 25000 crore by way of issue of non-convertible securities including but not limited to bonds and non-convertible debentures in one or more tranches.
  • Tata Motors' subsidiary Jaguar Land Rover has reported its best ever May retail sales of 44,946 vehicles, up 18% from May 2015.
  • Kotak Mahindra Bank is expecting to achieve a credit growth of 20% in FY17. Last year, the bank witnessed 14-15% growth in the overall credit off-take.
  • Axis Bank has raised $500 million at the London Stock Exchange after it launched India's first internationally-listed certified green bond to finance climate change solutions around the world.
  • NTPC, one of the largest power generators in the country is planning to raise around Rs 20,000 crore in the current fiscal.
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