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NSE Intra-day chart (10 January 2017)
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Market Commentary 11 January 2017
Markets to make a positive start on supportive regional cues

A session after exhibiting a distressing trade, Indian equity indices managed to pull through a sparkling performance by gaining over half percent on Tuesday, thanks to the hefty short covering in the beaten-down but fundamentally strong stocks. Sentiments remained up-beat after Finance Minister Arun Jaitley dismiss the slowdown concerns, said that higher tax mop up indicates uptick in economic activity. He further added that demonetised notes had no role to play in the tax collections for December as people were allowed to pay taxes in the spiked currency only in November and the indirect and direct tax collections between April and December this year increased by 25 percent and 12.01 percent respectively compared to the same period last year. Furthermore, describing demonetisation as only a ‘bump', Cisco Executive Chairman John Chambers said that India is well-positioned to maintain GDP growth rate of over 7 per cent for the next few years and it should be a 'top ally' for the US in the Asia Pacific region. Some support also came after RBI's newly-appointed Deputy Governor and noted economist Viral Acharya said, India, one of the world's fastest growing economies, is at an “exciting but challenging time” and has massive potential to become an economic powerhouse. However, some traders remained on the sidelines and refrained from any buying activity ahead of India's Budget scheduled on February 1, and caution ahead of key global events such as Donald Trump's swearing-in as US president later this month. Meanwhile, third-quarter earnings season kicked off today, with fairly upbeat numbers from IndusInd Bank. The Private lender reported a better-than-expected 29 per cent rise in net profit at Rs 750.64 crore for the quarter ended December 31, 2016 against Rs 581.02 crore in the corresponding quarter last year. On the global front, Asian markets ended mixed on Tuesday, tracking the lackluster cues from Wall Street and the plunge in crude oil prices overnight. Finally, the BSE Sensex rallied 173.01 points or 0.65% to 26899.56, while the CNX Nifty rose 52.55 points or 0.64% to 8,288.60. 

The US markets after another lackluster performance made a mixed closing again on Tuesday and while the Nasdaq closed higher for the sixth straight session, the Dow ended in red and S&P remained unchanged. Dow climbed within striking distance of 20,000 but was once again unable to break through that key psychological level. It was a relatively quiet day on the US economic front, with traders looking ahead to reports on producer prices and retail sales due on Friday. While many of the major sectors ended the day showing only modest moves, steel stocks showed a substantial move to the upside. On the other hand, oil service stocks came under pressure as the day progressed amid another steep drop by the price of crude oil. Nasdaq gained 20.00 points or 0.4 percent to a new record closing high of 5,551.82, while the S&P 500 ended the day unchanged at 2,269.90, and the Dow dipped 31.85 points or 0.2 percent to 19,855.53.

Crude oil futures tumbled on Tuesday to end near one month low, after the Energy Information Administration (EIA) said that it expects US crude oil production in 2018 to rise by 300,000 barrels per day (bpd) year-on-year. In its monthly energy outlook report, the EIA said that oil prices will average $52.50 a barrel for this year, up from $50.66 in the December forecast. For 2018, it forecast $55.18. Also there was report that Libya's crude-oil production has more than tripled in the past six months, however, Russia and Kazakhstan said they have met or exceeded their initial goals for cutting production. Benchmark crude oil futures for February delivery declined by $1.14 or 2.2 percent to $50.82 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended lower by $1.31 or 2.4 percent at $53.65 on the ICE.

Indian rupee, after making a good start, gave away most of its gains and concluded marginally stronger against dollar on sustained dollar selling by exporters. Local currency got some support with the global rating agency, Moody's report which maintained positive outlook on India and said beyond the short-term negative impact on growth, demonetisation has the potential to raise government revenues and provide some fiscal space to support growth if required. Additionally, strong gains in the local equity markets as well as strength of other Asian currencies against dollar added to the positive milieu for the local currency. On the global front, dollar dropped for a second day against the safe haven yen as trader's unwound long positions before U.S. President-elect Donald Trump holds a news conference on January 11, in New York. Finally, the rupee ended at 68.18, 2 paise stronger from its previous close of 68.20 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 2202.68 crore against gross selling of Rs 2588.10 crore, while in the debt segment, the gross purchase was of Rs 1223.08 crore with gross sales of Rs 727.46 crore.

The US markets ended mixed for the second consecutive session, with the tech heavy Nasdaq managing to extend gains while the Dow ended at opposite sides of the neutral line. Traders seemed reluctant to make significant moves amid uncertainty about the near-term outlook for the markets amid a relatively quiet day on the US economic front.  The Asian markets have made mostly a positive start led by a surge in mining companies, after evidence of quickening price growth in China boosted metals and other commodities. The Indian markets rallied in last session despite muted global cues, with hopes on the upcoming budget and a firmer rupee lending some support. Today, the start is likely to be in green tailing the positive regional cues and traders will be getting some support with Prime Minister Narendra Modi's statement that India is on threshold of becoming most digitised economy in the world. While he also declared his ambition to bring about a paradigm shift through a series of historic changes, reiterating the government's commitment to reforms and projecting India as a bright spot amid global gloom after having emerged as the world's fastest-growing economy. Meanwhile, the Reserve Bank of India (RBI) said that it recommended note ban after government advice. It said that the Government had on November 7, 2016 "advised the RBI that to mitigate the triple problems of counterfeiting, terrorist financing and black money, the Central Board of the Reserve Bank may consider withdrawal of the legal tender status of the notes in high denominations of Rs 500 and Rs 1,000." The auto stocks will be under pressure, as the data from Society of Indian Automobile Manufacturers (SIAM) showed that automobile sales for December fell the most for a month in 16 years pointing to a possible impact of demonetisation prompting consumers to delay their purchases of cars, motorcycles and trucks.

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


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Axis bank










  • Axis Bank has tied up with Ripple to offer cross-border payments solution.
  • State Bank of India has waived completely, the Merchant Discount Rate charges on debit card transactions for all small merchants having annual turnover of up to Rs 20 lakh for one year.
  • Bharat Heavy Electricals has bagged order from Power Grid for the augmentation of three Extra High Voltage substations in the state of Karnataka, on turnkey basis.
  • BPCL's Kochi refinery is operating normally after a minor fire that broke out in one of its sub stations.
  • ABB India in joint venture with Power Grid Corporation of India has won Rs 4,350 crore mega deal for long distance power transmission link in India

News Analysis