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NSE Intra-day chart (09 November 2016)
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Market Commentary 10 November 2016
Markets to recover with a positive start

Indian equity indices staged a sharp recovery in the second half of the trading session as the market took Donald Trump's victory in its stride. Donald John Trump was elected the 45th president of the United States on Tuesday, becoming the least politically experienced candidate to ascend to the office in the nation's 240-year history. Investors fear a Trump victory could cause global economic and trade turmoil and years of policy unpredictability, discouraging the Federal Reserve from raising interest rates in December as long expected. IT stocks came under pressure as investors reacted to the US presidential elections result. For the $150 billion IT services industry a Trump victory will only add to its woes and challenges the industry is facing on growth due to automation and technology disruption. Trump right from the start of his campaign days has stated that he wants to bring jobs back to the US. This includes both the manufacturing jobs that China has taken away and employment in tech industries that has come to India. On the domestic front, sentiments got undermined on Prime Minister Narendra Modi's announcement that 500 and 1,000 rupee banknotes would be withdrawn from circulation at midnight to crack down on rampant corruption and counterfeit currency. The surprise move was designed to bring billions of dollars worth of cash in unaccounted wealth into the mainstream economy, but this move will adversely impact the country's economy in near term, given that about 40% of the economy is driven by small- and medium-sized enterprises that largely depend on cash transactions. Sectors like real estate, construction material, and jewellery that use more of black money will take a big knock, while e-commerce sector having cash on delivery may feel impact on sales. Every unorganised sector in every trade also will feel the impact of this bold move. However, investors took some sigh of relief with the report that a new and simpler portal for the incoming Goods and Services Tax regime went live on Tuesday that will enable easy filing of returns and tax payments through credit/debit cards and other modes. Finally, the BSE Sensex declined 338.61 points or 1.23% to 27252.53, while the CNX Nifty dropped 111.55 points or 1.31% to 8,432.00.

The US markets showed strong upmove on Wednesday and the major averages closed at their best levels of the day, with traders reacting positively to Republican presidential nominee Donald Trump's surprise victory in the race for the White House. Trump defeated Hillary Clinton for the presidency. On the economy front, the Commerce Department released a report on Wednesday showing only a slight uptick in US wholesale inventories in the month of September. The Commerce Department said wholesale inventories inched up by 0.1 percent in September after edging down by a revised 0.1 percent in August. Inventories of petroleum and petroleum products and drugs and druggists' sundries showed significant increases during the month. On the other hand, the report said inventories of durable goods fell by 0.4 percent in September after inching up by 0.1 percent in August. The Commerce Department also said wholesale sales rose by 0.2 percent in September after climbing by 0.7 percent in August. The Dow Jones Industrial Average surged by 256.95 points or 1.4 percent to 18,589.69, the Nasdaq jumped 57.58 points or 1.1 percent to 5,251.07 and the S&P 500 surged up 23.70 points or 1.1 percent to 2,163.26.

Crude oil futures strengthened on Wednesday, with traders taking Donald Trump's historic election victory in stride along with stocks and the dollar which bounced back from a huge early slide following Donald Trump's surprise victory in the U.S. presidential election. Traders even overlooked report of rise in inventory, according to the Energy Information Administration (EIA) crude oil inventories increased by 2.4 million barrels (MMbbl) to a total of 485.0 MMbbl. Benchmark crude oil futures for December delivery was up by $0.29 or 0.6 percent to close at $45.27 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for December delivery rose by $0.32 or 0.7 percent to $46.36 a barrel on the ICE.

After making a weak start, Indian rupee recouped substantial ground and ended stronger against dollar on Wednesday as the country's move to withdraw larger banknotes from circulation was seen as a positive for the economy, ushering transparency and leading to easing inflation. Sentiments also got some support with the report that a new and simpler portal for the incoming Goods and Services Tax regime went live on Tuesday that will enable easy filing of returns and tax payments through credit/debit cards and other modes. On the global front, yen climbed against dollar after Donald Trump's victory in the U.S. election rattled investors. Finally, the rupee ended at 66.43, 19 paise stronger from its previous close of 66.62 on Tuesday.

The FIIs as per Wednesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 3848.00 crore against gross sell of Rs 3528.40 crore, while in the debt segment, the gross purchase was of Rs 1062.99 crore with gross sales of Rs 811.25 crore. 

The US markets recovering from the early slide posted strong gains in last session after Donald Trump defeated Hillary Clinton. He has promised he will build a wall along the border with Mexico, suspend the Syrian refugee resettlement program, repeal and replace the Affordable Care Act and renegotiate NAFTA. The Asian markets have made a strong start and the Japanese markets has recovered more than what it had lost in last session biggest daily drop since the Brexit poll. Other indices in the region too are up in range of 1-2 percent. The Indian markets made a strong come back from the severe early fall to close with cut of just over a percent. Today, the start is likely to be in green and the markets will be recovering the previous session losses with traders taking the Donald Trump's victory in stride. Industry body ASSOCHAM has expressed confidence that apprehensions linked to US President elect Donald Trump would certainly prove wrong even as India Inc looks forward to taking bilateral economic engagement to a greater level under the new administration. India Inc can join hands with the Trump Administration in building of the US infrastructure projects. The Indian industry has always been a great companion for the US industries in terms of enhancing value even to the American jobs. Meanwhile, Union Finance Minister Arun Jaitley has said the Modi government's decision to withdraw Rs 500 and Rs 1000 notes will move the country towards a cashless economy. He also said that deposits of now-defunct old Rs 500 and Rs 1,000 currency notes in bank accounts will not enjoy immunity from tax and law will apply on source of such money. Traders will also be getting some support with report that the Centre's net tax kitty rose up to Rs 8.51 lakh crore between April and October 2016. Net direct tax collections jumped up 10.66 per cent to Rs 3.77 lakh crore in October while direct tax mop-up was more robust and increased 26.7 per cent to Rs 4.85 lakh crore. Pharma stocks will keep buzzing as the US is the world's largest drug market and Drug prices and the worrying cost of healthcare featured prominently in Trump's campaign.

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Sun pharma





  • L&T has signed a long-term ‘Technical Licence Agreement' with Chiyoda Corporation for its 'Chiyoda Thoroughbred 121 Flue Gas Desulphurisation' Technology.
  • NTPC is well on course to meet its target of generating 10 gigawatts of solar energy as part of the government's aim of 100 GW by 2022.
  • Lupin has reported 34.30% rise in its net profit at Rs 653.08 crore for the quarter under review as compared to Rs 486.30 crore for the same quarter in the previous year.
  • SBI is gearing up to make available "adequate number" of Rs 100 notes at all its ATMs and branches within the next two days to help reduce the inconvenience to the public after the government last night scrapped Rs 500 and Rs 1,000 banknotes.
  • Power Grid has reported 32.01% rise in its net profit at Rs 1872.00 crore for the quarter ended September 30, 2016 as compared to Rs 1418.03 crore for the same quarter in the previous year.

News Analysis