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NSE Intra-day chart (07 April 2017)
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Market Commentary 10 April 2017
Markets to make a flat but positive start

Indian equity markets concluded the week on a daunting note with the benchmark indices suffering nasty lacerations of over half a percent in Friday's session. The frontline gauges failed to showcase any kind of resilience through the session and kept drifting to lower levels, to eventually settle around the psychological 9,200 (Nifty) and 29,700 (Sensex) levels. Market participants turned skittish after the United States launched cruise missiles against an air base in Syria, raising the risk of confrontation with Syrian backers Russia and Iran. Facing his biggest foreign policy crisis since taking office in January, Trump took the toughest direct U.S. action yet in Syria's six-year-old civil war. On the domestic front, sentiments were undermined as Reserve Bank of India (RBI) projected retail inflation to increase to 5% in the second half of the current fiscal citing risks of El Nino impacting the monsoon and one-off effects of the Goods and Services Tax. The central bank also said that a prominent risk could emanate from managing the implementation of the allowances recommended by the 7th Central Pay Commission (CPC). Investors got nervous as rupee surged to 20-month high, by extending gains to as much as 64.15 per dollar, it's highest since August 2015. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports, while it also make the country's other major exporters less competitive. Meanwhile, telecom stocks Bharti Airtel and Idea Cellular rose after rival Reliance Jio Infocomm, a unit of Reliance Industries, withdrew its summer surprise offer to subscribers. Further, Avenue Supermarts, which runs a chain of retail stores under the D-Mart brand, rallied after rating agency CRISIL upgraded its ratings on the bank facilities of the company. Finally, the BSE Sensex decreased 220.73 points or 0.74% to 29706.61, while the CNX Nifty was down by 63.65 points or 0.69% to 9,198.30.

The US markets ended the lackluster day of trade slightly in red on Friday. Sentiments remained downbeat following the release of a report from the Labor Department showing much weaker than expected job growth in March but also an unexpected drop in the unemployment rate. The non-farm payroll employment climbed 98,000 jobs in March after surging up by a revised 219,000 jobs in February. The street had expected an increase of about 180,000 jobs. Despite the weaker than expected job growth, the unemployment rate fell to 4.5 percent in March from 4.7 percent in February. The unemployment rate had been expected to come in unchanged. With the unexpected decrease, the unemployment rate fell to its lowest level since hitting 4.4 percent in May of 2007. Moreover, traders were also keeping an eye on developments overseas after the U.S. launched a missile strike on a Syrian airbase overnight. Reports said U.S. warships in the Mediterranean Sea launched 59 Tomahawk cruise missiles targeting the al-Shayrat airbase in central Syria. President Donald Trump claimed a suspected chemical weapons attack on a rebel-held Syrian town earlier this week was launched from the airbase that was struck. Trump's meeting with Chinese President Xi Jinping was also in focus, although the summit was largely overshadowed by the attack on Syria. The Dow Jones Industrial Average declined 6.85 points or 0.03 percent to 20,656.10, the Nasdaq shed 1.14 points or 0.02 percent to 5,877.81 and S&P 500 was down by 1.95 points or 0.08 percent to 2,355.54.

Crude oil futures continued their uptrend and ended at their highest level in a month on Friday following news the U.S. launched a missile strike on a Syrian airbase overnight. U.S. warships in the Mediterranean Sea launched 59 Tomahawk cruise missiles targeting the al-Shayrat airbase in central Syria. Though, Syria is not a major oil producer, the attack raised concerns about a broader conflict in the region that could affect supplies. Traders even overlooked the weaker than expected job growth data. The Labor Department said non-farm payroll employment climbed by 98,000 jobs in March after surging up by a revised 219,000 jobs in February. Benchmark crude oil futures for May delivery gained $0.54 or 1.10 percent to $52.24 on the New York Mercantile Exchange. In London, Brent crude for May delivery ended higher by $0.29 at $55.17 on the ICE.

Extending gains for third straight session, Indian rupee ended at 20-month high against dollar on Friday, due to selling of greenback by banks and importers. Some support also came with Fitch Ratings stating that it continues to rate India as BBB- or 'stable' on account of strong medium-term growth outlook and favourable external balances against weak fiscal position and a business environment which is still difficult. Meanwhile, the Reserve Bank of India dashed hopes for rate cuts in its monetary policy report. Moreover, rising geopolitical concerns after the United States launched cruise missiles against an air base in Syria, kept the American currency under pressure, in turn supporting the rupee. Finally, the rupee ended at 64.26, 27 paise stronger from its previous close of 64.53 on Thursday.

The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5331.32 crore against gross selling of Rs 4890.95 crore, while in the debt segment, the gross purchase was of Rs 2185.66 crore with gross sales of Rs 786.01 crore.

The US markets ended modestly in red in the last session on reports that employment in the US rose by much less than anticipated in the month of March. Though, despite the weaker than expected job growth, the unemployment rate fell to 4.5 percent in March from 4.7 percent in February. The Asian markets have made a mixed start with some indices trading in green led by the Japanese market after yen dropped against dollar, as investors weighed the impact of the American jobs report and the path for U.S. monetary policy tightening. The Indian markets suffered severe setback in the last session with major benchmarks deposing over half a percent, mainly on jeo-political worries. Today, the start of another truncated but data heavy week is likely to be mildly in green tailing positive global cues, now all eyes will be on corporate earnings season, commencing this week, with IT major Infosys scheduled to announce its January-March 2017 earnings on Thursday. Traders will be getting some support with CII Business Confidence Index released during the weekend, which said that India Inc.'s perceptions about the state of the economy slid in the last quarter of 2016-17, yet industry's confidence levels about the future have peaked to their highest level in more than six years. IT sector may get some support with Commerce Minister Nirmala Sitharaman's statement that the government is holding talks with the US administration over the H1-B visa issue and also working with the industries. She said that the government is in close touch with those industries which have a stake and which need to be assisted during this transitional phase.

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

Index

Previous close

Support

Resistance

NSE Nifty

9198.30

9174.10

9236.50

BSE Sensex

29706.61

29621.33

29839.00

Nifty Top volumes

Stock

Volume

(in Lacs)

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

ICICI Bank

172.67

277.35

274.40

281.65

Hindalco

145.76

193.50

191.37

196.62

Coal India

118.62

283.90

280.60

286.70

SBI

107.66

289.45

286.47

293.62

ITC

91.29

272.65

270.98

274.23

 
  • NTPC has commissioned Unit 1 of 660 MW of Solapur Super Thermal Power Project.
  • L&T commissioned gas turbines in open cycle for two large gas-based power projects in Bangladesh in quick succession during March 2017.
  • Tata Motors' subsidiary -- Jaguar Land Rover has reported record retail sales of 604,009 vehicles in the financial year ended 31 March 2017.
  • Bharti Airtel has doubled its network size by installing 1.8 lakh mobile sites in the last two years.
News Analysis