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NSE Intra-day chart (09 February 2016)
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Market Commentary 10 February 2016
Markets to make another soft start on weak global cues

The carnage in Indian stock markets got prolonged as the benchmarks continued to sway to the tune of depressing global developments and deposed another over a percentage point on Tuesday. Sentiments turned down-beat after Japanese equities posted its biggest daily drop in nearly three years amid strengthening yen. On the domestic front, sentiments got undermined after India reported GDP figures that suggested India's economic growth slowed in the third quarter, adding to pressure on Prime Minister Narendra Modi's government to expedite stalled reforms in the next session of parliament when it presents its annual budget. According to the Central Statistics Office (CSO), India's economy grew 7.3% year-over-year in the quarter and is expected to grow 7.6% for the entire fiscal year. Besides, deprecating rupee against the dollar also influenced the sentiment. Extending its fall for the third consecutive session, the rupee fell by 19 paise to 68.13 against the US dollar due to increased demand for the American unit from importers and banks. Investors also remained cautious with the expectation of rising inflation after the report that India's agriculture growth, measured in terms of gross value added at constant prices, slipped into negative territory in the October-December quarter (first time in FY16) because of a low kharif harvest. On the global front, European stock markets dropped for a seventh straight session on Tuesday, while in Asian markets Japan's Nikkei tumbled to a 2 -1/2 week low. Back home, the benchmark got off to a gap down opening, in tandem with the somber sentiments prevailing in global markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. The key gauges traded on a lackluster note for most part of the morning trades and drifted to the lowest point in the session in mid afternoon trades. Though the bourses recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. Finally, the BSE Sensex declined by 266.44 points or 1.10% to 24020.98, while the CNX Nifty dropped 89.05 points or 1.21% to 7,298.20.


The US markets closed its volatile session lower on Tuesday, as a rally in materials was offset by losses in the energy sector fueled by a fresh drop in oil prices amid a global stock selloff. All three benchmarks opened in negative territory, turned positive and later released their gains as oil prices skidded again. The market is starting to price out any more rate hikes from the Fed in 2016. Fed Chairwoman Janet Yellen's semiannual testimony before House and Senate committees is scheduled on Wednesday and Thursday. On the economy front, the number of Americans leaving jobs voluntarily rose 7% to 3.1 million in December. That was the highest since December 2006, and it confirms that the job market had hit its stride in December. It shows worker confidence in the ability to find another job, which had remained fragile, has picked up. Meanwhile, inventories at US wholesalers fell in December for the third straight month, another sign companies cut back on restocking toward the end of 2015 amid softer sales. Inventories dropped 0.1% to a seasonally adjusted $582 billion. The Dow Jones Industrial Average lost 12.67 points or 0.08 percent to 16,014.38, the Nasdaq was down 14.99 points or 0.35 percent to 4,268.76 while the S&P 500 dropped 1.23 points or 0.07 percent to 1,852.21.  


Crude oil futures extended their slump on Tuesday and once again neared their 12-year lows, after a report from the International Energy Agency (IEA) forecasted a further widening of the supply-demand imbalance on global markets. The IEA said its global oil demand growth is forecast to ease back considerably in 2016, to 1.2 mb/d, pulled down by notable slowdowns in Europe, China and the United States. It now ow expects prices to average $37.59 a barrel this year, down from a previous forecast for a 2016 average of $38.54. Benchmark crude oil futures for March delivery plunged by $1.71 or 5.74 percent to $27.98 a barrel after trading in a range of $27.75 and $30.61 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $30.36, down by $2.49 or 7.60 percent on the ICE.


Indian rupee, after making a weak start recouped substantial ground and ended stronger against dollar on Tuesday mainly on account of dollar's weakness against other currencies overseas. However, disappointing GDP data for the third quarter and weak local equities limited gains. India's economic growth for the third quarter of this financial year slowed to a four-quarter low at 7.3%, from the revised 7.7% of the previous quarter. Meanwhile, Central Statistics Office (CSO) has said that Indian economy will grow at a 5-year high of 7.6 percent in the fiscal ending March, compared with 7.2 percent a year earlier, overtaking a slowing China, on the back of improvement in manufacturing and farm sectors. On the global front, yen rose on Tuesday to its highest against the dollar since November 2014, as a sell-off in global stocks and worries about Europe's banks stoked demand for safe-haven currencies. Finally, the rupee ended at 67.90, 4 paise stronger from its previous close of 67.94 on Monday.


The FIIs as per Tuesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 1875.87 crore against gross selling of Rs 1914.94 crore, while in the debt segment, the gross purchase was of Rs 427.29 crore with gross sales of Rs 33.45 crore.     


The US markets continued their downtrend and ended modestly in red in last session, the trade remained volatile unable to sustain any significant moves. Traders were looking ahead to remarks by Federal Reserve Chair Janet Yellen on Wednesday. The Asian markets have plunged further in red, led by the Japanese market as persistent concern over market volatility helped the yen strengthen. The Indian markets embroiled in global turmoil lost considerable ground in last session. Traders were also concerned about the slow GDP growth in third quarter, ignoring CSO estimation of a five year high growth for the fiscal. Today, the start is likely to be soft-to-cautious on weak global cues. Also, the weak earnings of PSU banking stocks too are likely to weigh on the sentiments, three state-run lenders - Central Bank of India, Dena Bank and Allahabad Bank - reported massive losses and the spillover effects are likely to be seen on the other banking stocks today too. Market experts are of view that as India's benchmark Sensex has underperformed all major emerging market indices in 2016, barring China, the situation may worsen further. However, there will be some support to the markets with Economic Affairs Secretary Shaktikanta Das underscoring the importance of reforms, stating that the 7.6 percent GDP growth is 'significant' amid the global turmoil and there is no need to be 'skeptical'. The power sector stocks will be in action, as Power Minister Piyush Goyal has said that  India is expected to spend a whopping $ 1 trillion (about Rs 65 lakh crore) by 2030 on ramping up its power infrastructure as one of the world's largest energy consumers aims to provide 24/7 electricity to its citizens. Goyal has also said that there is need for the technology transfer at affordable rates for efficient expansion of renewable energy in India.


Support and Resistance: NSE Nifty and BSE Sensex



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  • Yes Bank has partnered with Smartbox Ecommerce Solutions to efficiently solve the last mile delivery challenges of E-commerce companies and making life easy for online shoppers.
  • Maruti Suzuki India, country's largest car maker, has reported 4.67% fall in its production to 1,15,782 units in January 2016, as compared to 1,21,448 units in same month last year.
  • Tata Power has generated 35,093 million units of power, collectively from all its power plants so far during the current fiscal.
  • Dr Reddy's Laboratories had posted a marginal increase in consolidated net profit at Rs 579.2 crore for the third quarter ended December 31.
  • Punjab National Bank has reported 93.41% fall in its net profit at Rs 51.01 crore for the quarter ended December 31, 2015 as compared to Rs 774.56 crore for the same quarter in the previous year.
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