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NSE Intra-day chart (08 December 2016)
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Market Commentary 09 December 2016
Markets to make a mildly green-to-cautious start


Indian equity indices staged a stunning performance on Thursday by strongly rallying over one and half percent, on the back of widespread buying by participants tracking firm global cue in anticipation of the European Central Bank extending stimulus. Local sentiments also got buttressed by Finance Minister Arun Jaitley's statement that demonetisation will boost growth in long run. The Finance Minister said the country will now have a cleaner economy, cleaner ethics and better GDP, he added that the economy, in the long term, is looking for a major change and policy makers now have a vision. Also, appreciation in rupee value against the dollar added to the optimistic sentiments. Indian rupee gained 19 paise to 67.44 against the dollar on Thursday on sustained selling of the US currency by exporters and banks amid foreign fund inflows. The foreign institutional investors which resorted to selling after Trump's win also reversed their trend in past few sessions. In last two trading sessions the foreign institutional investors bought shares worth Rs 356 crore. Investors got some confidence after Reserve Bank of India's (RBI) deputy governor enlightened that the banking sector's health is improving as bad loan accumulation has slowed and provision coverage has improved than in the previous quarters. The formation of incremental NPA (Non Performing Assets) has decelerated, the provision coverage ratio at the system level has slightly improved and compared to the last year, in this half year, the recoveries have been better and write-offs have reduced to some extent. Some support also came with S&P Global Ratings' statement that India with a large domestic economy will be less affected by the changes in growth and monetary policy in the new set-up under Donald Trump administration. Finally, the BSE Sensex gained 457.41 points or 1.74% to 26694.28, while the CNX Nifty rose 144.80 points or 1.79 % to 8,246.85. 


The US markets closed higher on Thursday; with the Dow industrials, S&P 500 and Nasdaq notching new records, after the European Central Bank held its key rates steady but said it would taper its asset-purchase plan in April, while leaving the door open for an extension of its economic stimulus program if necessary. Early trading had been choppy in light of the multisession stock advance, which has been underpinned by Donald Trump's election win a month ago. On the economy front, the number of Americans who applied for unemployment benefits in early December week running from November 27 to December 3 fell by 10,000 to 258,000, keeping the pace of layoffs near the lowest level in more than 40 years as the holiday season got under way. New claims had hit a five-month high the week before, though they often swing up and down during the holiday season that stretches from Thanksgiving to early January. Initial jobless claims have been extremely low for the past two years. They fell under 300,000 in early 2015 and have remained below that key threshold for 92 straight weeks, the longest such streak since 1970. The Dow Jones Industrial Average added 65.19 points or 0.33 percent to 19,614.81, Nasdaq was up 23.6 points or 0.44 percent to 5,417.36, while S&P 500 gained 4.84 points or 0.22 percent to 2,246.19.


Crude oil futures bounced back on Thursday and nymex crude once again moved past $50 per barrel mark, amid reports that Russia will meet with other oil producers this weekend to finalize a deal to cut supplies. After the Energy Information Administration reported a surprising draw down in U.S. oil inventories, investors turned their attention to the planned meeting between OPEC and non-OPEC producers to discuss coordinating cuts in production. Benchmark crude oil futures for January delivery surged by $1.07 or 2.15 percent to $50.84on the New York Mercantile Exchange. In London, Brent crude for February delivery ended higher by $0.89 or 1.68 percent at $53.89 on the ICE.


Extending gains for the third straight session, Indian rupee ended at 1-month high against the US dollar on Thursday. Rupee sentiments remained optimistic on hopes that the RBI's decision to withdraw the incremental CRR requirement will give banks more room to cut lending rates sharply. Local currency also got some support after Standard and Poor's (S&P) in its latest report stated that India will be less affected by changes in growth and monetary policy in the new set-up under Donald Trump administration due to its large domestic economy. The rupee looked strong from the very beginning and was also supported by strong rally in local equity markets. On the global front, euro strengthened against dollar ahead of the monetary policy decision from the European Central Bank, with analysts expecting an extension of monthly bond buying program to support crumbling Eurozone amid Italy turmoil and Brexit. Finally, the rupee ended at 67.35, 28 paise stronger from its previous close of 67.63 on Wednesday.


The FIIs as per Thursday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 4094.57 crore against gross selling of Rs 3740.17 crore, while in the debt segment, the gross purchase was of Rs 1972.85 crore with gross sales of Rs 4043.84 crore.


The US markets extended their surge in last session, with all the three major averages reaching new record closing highs on the heels of the European Central Bank's highly anticipated monetary policy announcement. The ECB said it decided to continue its asset purchases at the current monthly pace of 80 billion euros until the end of March of 2017. The Asian markets have made a mixed start, with some indices trading in red on European Central Bank's pledge to cut bond buying, though the Japanese market was higher on weakness in yen. The Indian markets went for a humungous rally in last session and major benchmarks bounced back in style to post gains of over one and half percent. Today, the start is likely to be in green but cautiousness may prevail and some consolidation too can be expected amid mixed Asian cues. Traders may get some support with CBEC Chairman Najib Shah's statement that the GST Council may in future decide to reduce the tax slabs under the Goods and Services Tax regime after analysing the revenue garnered and the compensation payouts to states. He said that any change in tax slab is possible after assessing the revenues and the effect of exemptions and deductions given in the new tax regime and analysing it with the expenditure. Meanwhile, in a move to promote cashless transaction or e-payment, the government announced discount on an array of services including discount on petrol and diesel. The Prime Minister too has urged the people to embrace increased cashless payments and integrate latest technology in their economic transactions. The auto stocks will be under pressure on report that demonetization has hit the auto sector hard, with sales in November being impacted across all segments.  Passenger vehicle sales in the country grew by 1.82 per cent in November, the lowest rate since February this year, on the other hand sales of two-wheelers fell by almost 6 per cent, and commercial vehicle sales were down close to 12 per cent. There will be some buzz in power stocks too, after the Supreme Court set aside an electricity tribunal's order that allowed it to recover Rs 1,050-crore dues from seven state utilities and Tata Power Distribution Company.


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  • Bharat Petroleum Corporation has inked a Consortium Agreement with Indian Oil Corporation and Hindustan Petroleum Corporation on December 07, 2016 to carry out pre-project activities.
  • Tata Motors' subsidiary-Jaguar Land Rover has reported its best ever November retail sales of 47,588 vehicles, up 2% compared to November 2015.
  • State Bank of India has inked an agreement with Haryana Government for promotion of digital transactions in the state.
  • Cipla has received final approval for its Abbreviated New Drug Application for Entecavir Tablets USP 0.5 mg and 1 mg, from the United States Food and Drug Administration.
  • Bharti Airtel has launched two new bundled packs for its prepaid customers with free voice calling and substantial data benefits.
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