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NSE Intra-day chart (08 January 2016)
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Market Commentary 11 January 2016
Markets to start another week on a soft note

A session after displaying a distressing performance, Indian benchmark indices managed to pull through a scintillating performance by rallying around half a percent on the last day of the week, thanks to the hefty short covering in the beaten down Realty and high beta Power counters. Eventually, the NSE's 50-share broadly followed index - Nifty garnered over three tens of a percent to settle above the crucial 7,600 levels while Bombay Stock Exchange's Sensitive Index - Sensex smashed over eighty points and closed above the psychological 24,900 mark. Sentiments remained up-beat with Finance Minister Arun Jaitley's statement that Indian economy has emerged as one of the fastest growing economies in the world indicating that the economy is firmly on the path of economic revival. The recovery rally in the Indian equity markets was also supported by value buying, as a sizeable number of stocks were trading at their yearly lows after four consecutive sessions of slide. Furthermore, the central government's effort to reach out to the opposition to break the impasse on the Goods and Services Tax (GST) Bill restored investors' confidence. Some support also came with the report that the World Bank expects India's growth to pick up to 7.8% in the next financial year, projecting it to be the fastest growing economy in the world for the next three years by a distance, riding on stronger domestic policy reforms. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1051.74 crore on January 07, 2016. Besides, caution prevailed over the upcoming domestic macro-data on industrial output, retail inflation and the third-quarter earnings results which start coming in from January 12, 2015. Earlier on Dalal Street, the benchmark got off to a positive start as the indices rebounded after the recent sell-offs following the strong bounce back on Asian markets after China suspended its market circuit breaker and set a firmer midpoint rate for trading of the yuan for the first time in nine days. The frontline indices soon gathered momentum and touched intraday highs in early hours but the optimism fizzled out sooner and the indices start losing steam thereafter and even drifted to the lowest point in the session in early afternoon trades. However, hefty short covering in the late hours helped the indices to bounce to higher levels. Finally, the BSE Sensex gained 82.50 points or 0.33% to 24934.33, while the CNX Nifty ended up by 33.05 points or 0.44% to 7,601.35.


Extending their southward journey for third straight session, the US markets not only ended in red terrain but also hit new three-month lows. Initially, the markets traded firmly on the back of bargain hunting, as traders picked up stocks at reduced levels following recent weakness. The markets also got some support from a rebound by Chinese stocks, as the Chinese Shanghai Composite Index jumped by 2 percent overnight. The price of crude oil fell to its lowest closing level in nearly twelve years amid ongoing concerns about a global supply glut. Recent downward momentum also weighed on the markets, as traders continued to sell stocks despite the lack of any other major catalyst. On the economic front, the Labor Department released a report before the start of trading showing much stronger than expected job growth in the month of December. The Labor Department said non-farm payroll employment climbed by 292,000 jobs in December. Meanwhile, the unemployment rate held at a more than seven-year low of 5.0 percent in December, matching expectations. The Dow Jones Industrial Average lost 167.65 points or 1.02 percent to 16,346.45, the Nasdaq was down 45.79 points or 0.98 percent to 4,643.63 while, the S&P 500 dropped 21.06 points or 1.08 percent to 1,922.03.


Crude oil futures continuing their decline fell slightly on Friday, ending the week that witnessed oil prices hit a 12-year low. The massive sell-off in Chinese equity market has exacerbated fears of weakening demand in the world's second-largest consumer of oil. However, traders largely overlooked the report from oil services firm Baker Hughes, which said that US oil rigs last week fell by 20 to 516 for the week ending on 516. It marked the third consecutive week of weekly draws and the seventh time in eight weeks that the rig count has moved lower. Benchmark crude oil futures for February delivery shed $0.10 or 0.29 percent to close at $33.16 a barrel after trading in a range of $32.66 and $34.26 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for February delivery declined by $0.19 or 0.56 percent to $33.56 a barrel on the ICE.


Snapping its two-days losing streak, Indian rupee bounced back against dollar on Friday, on fresh selling of dollar by banks and exporters, amid gains in Asian currencies markets. Besides, gains in equity market after four losing sessions also supported the rupee sentiments. Investors got some support with the Finance Ministry statement that the domestic economy has 'inherent resilience' to withstand global volatility triggered by China fears and the RBI and government are keeping a close watch. Furthermore, the sentiment got support from the report that government has agreed to accept demands set by the Congress party to back a landmark tax reform, raising hopes a political standoff that blocked the measure throughout last year might be resolved. On the global front, dollar rose more than half a per cent against both the euro and yen on Friday. Finally, the rupee ended at 66.64, 29 paise stronger from its previous close of 66.93 on Thursday.


The FIIs as per Friday'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 3654.82 crore against gross selling of Rs 4598.80 crore, while in the debt segment, the gross purchase was of Rs 4342.73 crore with gross sales of Rs 381.77 crore.    


The US markets made another week close in last session with stocks failing to sustain an initial upward move after the bargain hunting subsided. All the major averages lost over 6 percent in the very first week of the year. The Asian markets have made mostly a weak start following the negative cues from Wall Street on Friday and weak commodity prices amid continued worries about the Chinese economy. The Indian markets despite a choppy trade managed a positive close in last session, coming out of four straight sessions of fall, tracking a mostly positive trend in Asia and Europe. Today, the start is likely to be soft, on weak global cues, as the markets heads into the upcoming earnings season. Traders will be concerned with a private report stating that consumer sentiments in India fell for the fourth consecutive month in December to the lowest on record, as consumers reported a further deterioration in their personal finances amid rising inflation. Also, as the Commerce and Industry Minister Nirmala Sitharaman has said the devaluation of the Chinese currency is a "worrying" development which will make Indian exports expensive and widen the trade deficit with the neighbouring nation.  However, there will be some solace with a World Bank report stating that India will continue to be the bright spot of the global economy and is projected to grow at a robust 7.8 percent in fiscal 2016-17, more than a percentage point higher than China's. Metals and mining stocks will be buzzing as India is getting ready to open up commercial coal mining to private companies and Coal Secretary Anil Swarup has stated that the government has identified mines it plans to auction, and is now finalising other terms such as eligibility criteria for companies to take part and whether and how to set up revenue sharing.


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  • Maruti Suzuki India has released the sketch of its much awaited compact sports utility vehicle 'Vitara Brezza'.
  • Coal India's arm Mahanadi Coalfields has crossed 100 million tonne production milestone and is taking steps to achieve the target of 150 million tonne output for the current fiscal.
  • Tech Mahindra has entered into a strategic alliance with MetricStream to deliver GRC Solutions across the globe.
  • Mahindra & Mahindra is planning to roll out two more passenger cars/utility vehicles this financial year, thereby completing the planned launch of 10 vehicles during 2015-16.
  • ICICI Bank will partner with the FINO PayTech to foray into the payments bank space.
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