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NSE Intra-day chart (11 January 2016)
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Market Commentary 12 January 2016
Markets to see some recovery with a positive start

It turned out to be a lackadaisical performance from the benchmark indices on Monday, as they failed to snap the session in the green territory and settled below the neutral line as investors at large remained reluctant to build on long positions ahead of official start of the third quarter earnings season with TCS' result and also monthly industrial production data. The NSE's 50-share broadly followed index Nifty, took a cut of about half a percent to settle above the crucial 7,550 support level while Bombay Stock Exchange's Sensitive Index Sensex slipped by over hundred points and closed below the psychological 24,900 mark. Moreover, the broader markets too succumbed to the selling pressure and closed with losses of about a percent. Sentiments remained subdued 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. Trading sentiments were weakened further with Commerce and Industry Minister Nirmala Sitharaman's statement that 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, investors got some strength with 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.  Earlier on Dalal Street, the benchmarks got off to a weak start as the indices breached the psychological 7,550 and 24,700 levels in the early moments of trade since investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets. After the subdued opening, the key gauges plunged to lowest point in the day on sharp across the board sell-off. Thereafter started the road to recovery for the bourses which kept slowly but steadily moving towards the neutral line. The frontline indices even managed to break into the positive terrain in afternoon trades but only for a brief period, tracking the leads from European counterparts. But some final hour profit booking followed by mild short covering ensured that the bourses snap the session with moderate cuts. Finally, the BSE Sensex declined by 109.29 points or 0.44% to 24825.04, while the CNX Nifty ended down by 37.50 points or 0.49% to 7,563.85.


The US markets made a mixed closing on Monday after trading choppy through the day, as traders expressed some uncertainty about the outlook for the markets following recent weakness. The lack of major US economic data released on the day too made traders reluctant to make any significant moves. Losses in the Oil & Gas, Basic Materials and Healthcare sectors restricted any major gains in the markets. Traders are now keeping an eye on reports on retail sales, producer price inflation, industrial production, and consumer sentiment for any further cues. The Dow Jones Industrial Average rose 52.12 points or 0.32 percent to 16,398.57 and the S&P 500 inched up 1.64 points or 0.09 percent to 1,923.67, while the Nasdaq edged down 5.64 points or 0.12 percent to 4,637.99.


Crude oil futures plunged on Monday to hit new 12-year lows as the rout in equities continued unabated amid concerns about the global economy. Widespread concerns related to the slumping China economy pulled prices down to fresh lows, even though the People's Bank of China (PBOC) attempted to calm markets by setting the daily fix for the yuan against the dollar dramatically higher in comparison with its level at last week's close. Investors even digested reports of an attack at a mall in Baghdad, where gunmen reportedly set off a car bomb at the entrance, killing at least 10. Benchmark crude oil futures for February delivery slumped by $1.75 or 5.3 percent to close at $31.41 a barrel after trading in a range of $30.89 and $33.20 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for February delivery declined by $2.03 or 5.98 percent to $31.88 a barrel on the ICE.


Indian rupee ended weak against dollar on Monday amid persistent demand for the US currency from banks and importers. Besides, weak trade in the equity market and dollar gains against other currencies overseas also weighed on the sentiment. Furthermore, sentiments remained dented 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. On the global front, yen fell from its strongest level since August versus the dollar. Finally, the rupee ended at 66.81, 17 paise weaker from its previous close of 66.64 on Friday.


The FIIs as per Monday's data were net sellers in equity and in debt segments both. In equity segment, the gross buying was of Rs 3807.03 crore against gross selling of Rs 4484.77 crore, while in the debt segment, the gross purchase was of Rs 528.89 crore with gross sales of Rs 812.21 crore.    


The US markets showed a mixed performance in the last session following the sell-off seen last week, stocks showed a lack of direction over the course of the trading day lacking any major cues. The Asian markets made a mixed start, as oil prices languished at near 12-year lows, with investors fretting over whether Beijing may be losing control of the economy. Though, many of the indices are showing signs of recovery, the Japanese market was playing a catch up after a long weekend. The Indian markets suffered another setback in last session and hit 19 months low on the back of continued worries about Chinese equities. Today, the start is likely to be cautious but in green and some recovery can be expected on supportive regional cues. Traders will be eyeing the industrial production and inflation data to be released later in the day after market hours. While the IIP is likely to be lower as indicated by Core sector data, the consumer inflation probably edged up for the fifth straight month in December, driven by higher food prices. Meanwhile, rating agency Moody's has said that India's market outlook for this year will be dependent on consumption demands, corporate earnings and inflation trends. The agency though expects the country to be the world's fastest growing major economy this year, it believes that the market trends will depend on whether inflation remains under control and corporate profits revive. The auto sector stocks will continue buzzing, as passenger vehicle sales in December grew in double digits for the third month in a row, posting the highest ever volumes in December ever. Industry body SIAM data though has shown that two-wheeler sales were disappointing, dragged down by motorcycle sales into negative territory. Stocks related to defence procurement too may be in action, as a new Defence Procurement Procedure (DPP) emphasising on higher indigenisation has been approved by the Defence Acquisition Council led by Defence Minister Manohar Parrikar.


Support and Resistance: NSE Nifty and BSE Sensex



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  • Tata Steel has reported 10.3% rise in sales to 2.35 million tonne in the third quarter ended December 31, 2015 as compared to 2.13 mt sold in previous corresponding period.
  • BHEL has achieved one more significant milestone in capacity addition programme of the country by successfully commissioning 520 MW coal-based thermal generating unit in Andhra Pradesh.
  • Mahindra & Mahindra's arm Mahindra eMarket has entered into strategic partnership with Vakrangee for promoting and booking automobile products through Vakrangee Kendras.
  • Tata Motors' subsidiary Jaguar Land Rover has achieved its best ever full year global sales performance in 2015, retailing 487,065 vehicles, up 5 percent on the prior year.
  • Bharti Airtel has unveiled its high speed 4G services in Hosur, in Tamil Nadu.
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