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NSE Intra-day chart (08 September 2016)
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Market Commentary 09 September 2016
Weak global trends to give a sluggish start to the local markets


Indian stock markets witnessed a fairly stable day of trade on Thursday as healthy quarterly results, consistent buying by foreign funds and a rise in global crude oil prices, buoyed the investors' sentiments. Some support also came with Finance Minister Arun Jaitley's statement that the government is 'running against time' for the implementation of GST, but added that he would certainly like to give it a try. He said the new GST, once implemented, would have a transformational impact by creating a common market in the country, while also acting as a transfer mechanism that would aid poorer states. Adding the confidence among investors, Economic Affairs Secretary Shaktikanta Das said that implementation of GST will bring small and medium enterprises (SMEs) into the national value chain and committed many more reforms. Furthermore, with an aim to give capital markets a big push, regulator SEBI is likely to ease out regulations for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), this month. However, there was some concern too with the report that the country-wide monsoon deficit stood at 4% with northeastern and eastern states reporting 13% less rains from June 1 to September 7, 2016. June witnessed a rain deficiency of 11%, while July had 7% of surplus rainfall. August again witnessed a dip of 9.7%. Meanwhile, Auto stocks edged higher after the repot that domestic passenger vehicle sales grew for a 14th straight month in August with a 16.68% increase, promoting auto industry body Siam to revise upward its growth estimate for the ongoing fiscal to 10-12%.  Metal and mining stocks gained traction as Chinese trade data topped forecasts and imports recorded their first annual rise since late 2014.  However, IT and Tech stocks succumbed to heavy selling pressure as TCS gave a cautious outlook for the coming quarters, stating that clients are holding back on discretionary spending. On the global front, rebounding from day's lows, several Asian markets ended in positive territory on Thursday, while European stocks were slightly higher in early trade. Back home, finally, the BSE Sensex surged by 118.92 points or 0.41% to 29045.28, while the CNX Nifty gained 34.55 points or 0.39% to 8,952.50.


The US markets closed lower on Thursday, after the European Central Bank kept key interest rates steady but disappointed some by not announcing additional measures to boost Europe's sluggish economy. The ECB's policy inaction, so far, has been a blow to risk appetite, suggesting that the absence of additional new stimulus by the ECB may give the Federal Reserve more room for tighter monetary policy. Investors have been closely eyeing each data set, looking for clues about whether the Fed will raise interest rates in September. Market expectations for a rate hike in September were 18 percent, according to the CME Group's FedWatch tool. On the economy front, the number of Americans who applied for unemployment benefits last week stretching from August 28 to September 3 fell by 4,000 to a two-month low of 259,000, reflecting the unwillingness of businesses to part with workers in a tight labor market despite slower economic growth. Meanwhile US consumer borrowing picked up in July, bolstering expectations that consumer spending will remain a key factor in accelerating economic growth. Outstanding consumer credit rose by a seasonally adjusted $17.7 billion in July. The Dow Jones Industrial Average lost 46.23 points or 0.25 percent to 18,479.91, Nasdaq dropped 24.45 points or 0.46 percent to 5,259.48, while S&P 500 was down 4.86 points or 0.22 percent to 2,181.30. 


Crude oil futures extending the gains surged on Thursday, after data showed that crude supplies in the U.S. fell by the most since April 1985. The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 14.51 million barrels in the week ended September 2.The gasoline inventories declined by 4.211 million barrels, while the distillate inventories including diesel, increased by 3.382 million barrels. Nymex crude posted the biggest daily percentage gain for US futures since April. Benchmark crude oil futures for October delivery gained $2.12 or 4.7 percent to close at $47.62 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery surged by $2.01 or 4.2 percent to $49.99 a barrel on the ICE.


Indian rupee ended weaker against the US dollar, on increased demand of the greenback from the importers and the banks. Rupee Sentiments remained down with the report that the country-wide monsoon deficit stood at 4% with northeastern and eastern states reporting 13% less rains from June 1 to September 7, 2016. June witnessed a rain deficiency of 11%, while July had 7% of surplus rainfall. August again witnessed a dip of 9.7%. Weakness in Asian currencies too weighed on the rupee sentiments. However, strong gains in the domestic equity market restricted the rupee losses. On the global front, yen gained against the dollar after a Bank of Japan deputy governor gave few fresh clues on whether the central bank will expand its monetary stimulus this month. Finally the rupee ended at 66.43, weaker by 6 paise from its previous close of 66.37 on Wednesday.


The FIIs as per Thursday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5627.48 crore against gross sell of Rs 4763.27 crore, while in the debt segment, the gross purchase was of Rs 2189.86 crore with gross sales of Rs 675.87 crore.


The US markets despite coming off the day's low ended modestly lower in the last session, following the European Central Bank's announcement of its decision to leave interest rates unchanged, though selling pressure remained relatively subdued, limiting the downside for the broader markets. The Asian markets have made mostly a lower start as investors weighed prospects for further monetary easing in Europe and Japan. Comments from ECB chief Mario Draghi diminishing the prospect of an increase in asset purchases weighed on shares. The Indian markets slightly gathered momentum to make a decent close in last session. Today, the start is likely to be a bit cautious on sluggish global cues, though traders will be getting some support with the President Pranab Mukherjee giving his assent to the landmark Goods and Services Tax (GST) Bill. Now the Centre will have to pass the Central GST and Integrated GST Bills, while the states will need to approve their respective GST legislations. The government targets to implement the GST system from 1 April, 2017. Meanwhile, US President Barack Obama has expressed confidence that the Goods and Services Tax, passed by the Indian parliament last month, will unleash significant economic activity. Traders will be eyeing the Index of industrial production data for the month of July to be released after the market hours. Industrial output growth halved to 2.1 per cent in June, as compared to 4.2 per cent in June 2015. The auto stocks will keep buzzing as the sales of passenger vehicles, including cars, grew 16.7% in August from the year-ago period and the Society of Indian Automobile Manufacturers (Siam) has revised its growth projections in the range of 11-13% in FY2017, as against an earlier forecast of 6-8%.


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  • M&M has signed a MOU to enter into a strategic alliance with the country's largest shared transportation platform, Ola to empower 40,000 driver partners across India by 2018.
  • ONGC has registered 21.16% fall in its net profit after tax at Rs 4232.54 crore for the quarter as compared to Rs 5368.36 crore for the same quarter in the previous year.
  • Yes Bank has commenced first of its kind Unified Payments Interface services by partnering with 50 businesses, to catalyze one of the biggest payment innovations in the banking universe with an aim to make fund transfer easier and move towards a cashless economy.
  • SBI has entered into partnership with Tata Housing that would enable easier financing and purchase of homes.
  • ICICI Bank has deployed 'Software Robotics' in over 200 business processes across various functions of the bank.
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