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NSE Intra-day chart (07 November 2016)
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Market Commentary 08 November 2016
Markets to make another positive start tailing global cues

Indian benchmark equity indices halting four consecutive session's losing streak emerged triumphant on Monday. The relentless and across the board value picking ensured that the frontline indices settle closer to the psychological 8,500 (Nifty) and 27,450 (Sensex) levels amid positive developments on US election front as the FBI said Hillary Clinton would not face charges over her use of a private e-mail server. The news lifted a cloud over Clinton's presidential campaign two days before the U.S. election. On the domestic front, sentiments also got some support from reports that foreign direct investment (FDI) into the country grew by over 30 percent to $21.62 billion during the first half of 2016-17. During April-September of 2015-16, India received FDI worth $16.63 billion. Furthermore, National Council of Applied Economic Research (NCAER) pegged India's GDP growth at 7.6 percent for the current fiscal on back of pick-up in rural demand and positive signals on the manufacturing front. Adding the optimum among the investors London's Deputy Mayor for business Rajesh Agarawal said no country can overlook India which is emerging as a strong country with a galloping economic growth rate. He also said that India and UK have business and cultural ties for centuries and due to this Indians enjoy good influence in various sectors in UK. However, gains remained capped on the report that Reserve Bank of India (RBI) is expected to maintain a status quo in the upcoming December meet and will go for a 25 bps rate cut each in its February and April policy review meeting. According to the report, the accommodative policy stance of the central bank would be largely driven by weak global growth and the fact that inflation is expected to be on track to its March-2017 target of 5 per cent. On the global front, Asian markets settled on a positive note on Monday, while European markets opened strong. Back home, finally, the BSE Sensex gained 184.84 points or 0.68% to 27458.99, while the CNX Nifty rose 63.30 points or 0.75% to 8,497.05.

The US markets made a sharp bounce back and moved higher on Monday and the major averages regained ground after ending last Friday's trading at their lowest closing levels in about four months. Traders' optimism strengthened with FBI once again clearing Democratic presidential nominee Hillary Clinton of criminal charges related to her use of a private email server while Secretary of State, which seemed boosting her chances of emerging victorious on Election Day on Tuesday. On the economy front, a report released by the Federal Reserve said that consumer credit in the U.S. increased by a little more than expected in the month of September. As per Fed report consumer credit climbed by $19.3 billion in September after jumping by an upwardly revised $26.8 billion in August. The Fed also said non-revolving credit such as student loans and car loans increased by $15.1 billion in September after surging up by $21.2 billion in August. The Dow Jones Industrial Average surged by 371.32 points or 2.1 percent to 18,259.60, the Nasdaq soared 119.80 points or 2.4 percent to 5,166.17 and the S&P 500 ended higher by 46.34 points or 2.2 percent to 2,131.52.

Crude oil futures stabilized on Monday and moved a bit higher after witnessing significant losses last week, as markets rallied on expectations Hillary Clinton will win a close election against Donald. Also, OPEC reaffirmed its commitment to cutting output. OPEC secretary-general Mohammed Barkindo said Monday the cartel is committed to a planned cut in output to 32.5-33 million barrels per day to address a supply glut. Though, major gains were capped with traders remaining skeptical about production cut, as a number of key producers say they should be exempt. Iran is arguing they should be free to pump oil after years of crippling sanctions. Benchmark crude oil futures for December delivery gained $0.88 or 1.9 percent to close at $44.89 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for December delivery declined by $0.57 or 1.32 percent to $46.15 a barrel on the ICE.

Indian rupee depreciated against the US dollar on Monday, after FBI said that Hillary Clinton would not face criminal charges over her use of a private email server, easing worries over her US presidential bid. Sentiments also remained dampened with report that Reserve Bank of India (RBI) is expected to maintain a status quo in the upcoming December meet. According to the report, the accommodative policy stance of the central bank would be largely driven by weak global growth and the fact that inflation is expected to be on track to its March-2017 target of 5 per cent. However, strong gains in the domestic equity markets capped the rupee losses. Finally, the rupee ended at 66.73, 3 paise weaker from its previous close of 66.70 on Friday.

The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5125.38 crore against gross sell of Rs 4632.80 crore, while in debt segment, the gross purchase was of Rs 827.53 crore with gross sales of Rs 344.80 crore. 

The US markets surged in last session and all the major averages posted their biggest one-day percentage gain since March 1, ahead of US presidential election on improving prospects for Democrat Hillary Clinton to win. Clinton is seen by investors as offering greater certainty and stability. The Asian markets have made mostly a positive start on Tuesday, with investor sentiment buoyed by improving prospects for Democrat Hillary Clinton to win. The Indian markets snapping four session losing streak closed with good gains in last session on some upbeat earnings announcement and US Presidential election output hopes. Today, the start is likely to be in green and the markets will be extending the gains, though some cautiousness will be seen too ahead of the US presidential election and traders will also be eyeing the different announcements from UK Prime Minister Theresa May, who is on Indian visit. Meanwhile, a report has stated that GST benefits are likely to accrue over time rather than immediately, though in the long run the indirect tax regime will boost growth, lower costs and strengthen tax revenues. It added that it expects over time, as the GST council widens the tax net, minimises the tax slabs and lower the standard tax rates, the benefits will be substantial. There will be some buzz in the hotel stocks, as the Hotel and Restaurant Association of Western India (HRAWI) has said that the government's four-tier structure in Good and Services Tax (GST), in which the service sector will be taxed at 18 percent, will cause the tourism sector a major setback. The auto industry too will be in action after it discussed with Revenue Secretary Hasmukh Adhia, the rate of cess and definition of luxury cars under the GST regime, which is likely to kick in from April next. There will be lots of scrip specific actions based on earnings announcement.

Support and Resistance: NSE (Nifty) and BSE (Sensex)


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Tech Mahindra





  • Maruti Suzuki and its parent Suzuki Motor are working to develop low-cost hybrid compact cars as they prepare to maintain their stronghold in the Indian market with eco-friendly vehicles expected gain traction.
  • State Bank of India is reportedly planning to raise Rs 5000 crore during the third quarter of the current fiscal year.
  • Tata Motors' subsidiary -- Jaguar Land Rover (JLR) has reported its best ever October retail sales of 46,325 vehicles, up 11% compared to October 2015.
  • L&T-MHPS Boilers, a joint venture of Larsen & Toubro and Mitsubishi Hitachi Power Systems, Japan, has signed a Technology Licence Agreement for Selective Catalytic Reduction systems with MHPS.
  • Reserve Bank of India has increased the foreign holding limit to 30% of the paid-up capital in Grasim Industries under the portfolio investment scheme.

News Analysis