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NSE Intra-day chart (11 March 2016)
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Market Commentary 14 March 2016
Markets to start the new week on a positive note tailing other global bourses


The domestic equity markets showed a notable recovery in the second half of the session and ended the day in the green, however the trade remained volatile throughout the day. Sentiments got some support with IMF's indication that it may revise its estimate for global economic growth in its spring meeting but India is better placed than other emerging market countries. The recent reforms raised hopes the government would take further measures after key parts of its legislative agenda, including a revamp of the goods and services tax (GST), had been stuck in parliament. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1063.11 crore on March 10, 2016. However, Investors maintained a cautious approach ahead of Index of Industrial Production (IIP) data for January scheduled to be released later in the day. On the global front, Asian markets ended the week high on Friday, while European shares bounced back. At home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade, tracking the weakness in other Asian markets after ECB chairman Mario Draghi said the bank would consider further rate cuts only in extreme cases. But the frontline indices slowly but steadily started gathering steam and surged by over half a percent by late morning trades as energy firms such as Reliance Industries rallied after the country simplified oil and gas licensing rules, while property developers gained after parliament passed a real estate bill. However, the key gauges suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets due to lack of encouraging leads. Finally, the BSE Sensex gained 94.65 points or 0.38% to 24717.99, while the CNX Nifty rose 24.05 points or 0.32% to 7,510.20.


US markets rallied on Friday and ended the session at their best closing levels in two months. The initial strength on Wall Street came on the heels of a rally by European stocks, which led to a 2.6 percent jump by the European STOXX 600 Index. European stocks showed a considerable rebound on the day after pulling back sharply over the course of the previous session. An increase by the price of crude oil also aided sentiments, with crude for April delivery climbing $0.66 to $38.50 a barrel. The price of crude oil reached a three-month closing high, benefiting from an optimistic report from the International Energy Agency. In its monthly report, the IEA said the price of oil may have bottomed due to lower output from the U.S. and other non-OPEC producers. The Dow Jones Industrial Average surged 218.18 points or 1.28 percent to 17213.31, Nasdaq soared 86.31 points or 1.85 percent to 4,748.47 and the S&P 500 was up by 32.62 points or 1.64 percent to 2022.19. 


Crude oil futures surged again to end at to their highest level of 2016 on Friday, as the domestic rig count last week fell to its lowest level on record. Oil services firm Baker Hughes said the total number of US oil rigs fell by nine to 480 for the week ending on March 4. Previously, the lowest total on record came on April 23, 1999 when the rig count total dipped to 488. Prices also got some support with Paris-based International Energy Agency (IEA) indicating that the prolonged rout in oil may have hit a bottom. In a monthly forecast, the IEA said that non-OPEC output would decline by 750,000 bpd in 2016, up from previous estimates of 600,000.  Benchmark crude oil futures for April delivery ended at $38.50, up $0.66 or 1.74 percent after trading in a range of $37.92 and $39.02 a barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery ended at $40.40, up $0.35 or 0.87 percent on ICE.


Indian rupee ended marginally stronger against dollar in last session of the week on the back of fresh selling of the American currency by banks and exporters. Besides, gains in local equity market too supported the domestic currency. Further, some support came with IMF's indication that it may revise its estimate for global economic growth in its spring meeting but India is better placed than other emerging market countries. However, caution ahead of the release of domestic industrial output numbers kept the currency in a tight band. The government will announce Index of Industrial Production (IIP) data for January later in the day. On the global front, euro dipped on Friday after a shocking series of moves around Thursday's European Central Bank meeting which ended with its biggest gain in a month. Finally, the rupee ended at 67.05, 2 paise stronger from its previous close of 67.07 on Thursday.


The FIIs as per Friday's data were net buyers in equity segment while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 4740.00 crore against gross selling of Rs 3562.59 crore, while in the debt segment, the gross purchase was of Rs 888.64 crore with gross sales of Rs 1821.83 crore.         


The US markets surged in last session, with major averages ending the session at their best closing levels in two months. Increase in crude oil prices generated buying interest and led the energy stocks higher. The Asian markets have made an all green start led by the surge in the Japanese market which was trading up by over two percent in early deals, buoyed by surge in Japanese machinery orders. The Indian markets moved higher in last session going through a choppy trade, ending the week on modestly higher note. Today, the start is likely to be in green taking cues from the other global markets. Traders will also be getting some encouragement with International Monetary Fund (IMF) chief Christine Lagarde's statement that the fiscal stance adopted by India is exactly appropriate and a very sensible objective that has been set. On the home front Finance Minister Arun Jaitley has said that the government hopes to pass the landmark Constitution Amendment Bill for national Goods and Services Tax (GST) as well as the bankruptcy and insolvency bill in the second half of the Budget session beginning April 20. Meanwhile, RBI Governor Raghuram Rajan brushing aside the contention that exchange rate is impacting exports has said that the shipments can only be increased by raising productivity, improving infrastructure and simplifying regulations, which is in the domain of the government. There will be some cautiousness too in reaction to the weak industrial production data and especially the capital goods stocks will be under pressure. IIP for the month of January come in at -1.5 compared to revised to -1.2 percent December IIP data earlier. Traders will also be eyeing the twin inflation numbers CPI and WPI, slated to be announced later in the day. There will be some buzz in the telecom stocks, as Industry body Cellular Operators Association of India (COAI) has said that the proposal in Finance Bill 2016 to declare spectrum allocations as services will result in a tax burden of Rs 77,000 crore for operators and is likely to hurt consumers, as they have to pay higher tariff rates if the load is passed on to them.


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  • Dr. Reddy's has entered into strategic collaboration with TR-Pharm, involving 3 biosimilar products.
  • M&M's wholly-owned subsidiary Mahindra Holdings has increased its stake in the equity share capital of Gateway Housing Company, from 50% to 100% on March 10, 2016.
  • The country's largest two-wheeler maker Hero MotoCorp is planning to enter new markets globally, including Mexico and Nigeria, as it eyes 1 crore unit sales by 2017-18.
  • Wipro has inked pact with Tableau to offer solution accelerators and innovative delivery models for Wipro's and Tableau's customers across the globe.
  • ICICI Bank has unveiled a credit-linked subsidy scheme for home loans under Pradhan Mantri Awas Yojana.
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