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NSE Intra-day chart (12 September 2016)
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Market Commentary 14 September 2016
Markets to get a soft start on weak global cues


Indian benchmarks started a new week on a devastating note as they went on to extend the declining streak for the second successive session, investor sentiment was rattled by concerns that the US Federal Reserve could be considering an imminent interest rate hike. The frontline indices shaved off over one and half percent and breached 28,400 (Sensex) and 8,750 (Nifty) levels on the downside. Adding anxiety among market patients a private report indicated that the Bank of Japan was considering ways to steepen the Japanese yield curve, along with worries that central banks more generally were running short of fresh stimulus options. On the domestic front, sentiments were undermined by the report that the monsoon weakened in most parts of the country this month, taking the season's total rainfall to 5 per cent below normal. September rainfall has been 19% lower than normal, except in east and northeast India, where it was 66% in excess. All other regions reported a deficit of 40%-50% this month. Besides, factors like depreciation in rupee values against the dollar and FIIs outflow in the previous session, also weighed on the sentiment, extending losses for the third straight session on fresh buying of the American currency by banks and importers. Investors also turned cautious ahead of macroeconomic data-IIP for July and inflation data for August-scheduled to be released later in the day. Meanwhile, some telecom operators like Bharti Airtel and Idea Cellular came under pressure after Trai decided to reject the demand of incumbent mobile operators such as Bharti Airtel, Vodafone and Idea Cellular for an increase in the fee that they charge from Reliance Jio to terminate its calls on their networks.  The regulator has also asked the incumbent operators to provide requisite number of interconnect points to Jio at the earliest and ensure that consumers are not put at an inconvenience due to lack of connectivity. Further, Fertiliser stocks slipped after government scraped rule that required actual user as a condition for import of industrial or technical grade urea. Finally, the BSE Sensex declined by 443.71 points or 1.54% to 28353.54, while the CNX Nifty dropped 151.10 points or 1.70% to 8,715.60. Indian markets remained closed on Tuesday on account of Id-Ul-Fitr.


The US markets closed lower on Tuesday, as equities suffered a sharp sell-off amid a slump in energy shares and uncertainty about the Federal Reserve's plans for monetary policy. A decline in crude-oil prices, as the International Energy Agency warned of slowing growth in demand, also helped fuel the downdraft for the stock benchmarks. Fed Governor Lael Brainard stated that the Federal Reserve should avoid removing support for the US economy too quickly, that solidified the view the central bank would leave interest rates unchanged next week. On the economy front, the federal government ran a budget deficit of $107 billion in August, $43 billion more than in August 2015.The government spent $338 billion last month, up 23% from the same month a year ago. Spending rose notably for veterans' programs and Medicare. For the first 11 months of the fiscal year, spending is up 3%. Total receipts for August were up 10% to $231 billion. The Dow Jones Industrial Average lost 258.32 points or 1.41 percent to 18,066.75, Nasdaq dropped 56.63 points or 1.09 percent to 5,155.26, while S&P 500 was down 32.02 points or 1.48 percent to 2,127.02. 


Crude oil futures declined sharply on Tuesday after the International Energy Agency (IEA) said that a sharp slowdown in global oil demand growth, coupled with ballooning inventories and rising supply, means the crude market will be oversupplied at least through the first six months of 2017. The IEA sharply cut its forecast for global oil demand for this year by about 100,000 barrels a day for to 1.3 million barrels a day. Traders failed to get any support with upbeat Chinese data on industrial output growth for August and market remained in profit-taking mode through the day. Benchmark crude oil futures for October delivery dropped $1.39 or 3 percent to close at $44.90 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery declined by $1.22 or 2.5 percent to $47.10 a barrel on the ICE.


Indian rupee extended its weakness for the third consecutive day and hit over a one-week low against the US dollar on Monday, following continued dollar demand from banks and importers, coupled with heavy capital outflows. Sentiments remained down with the report that the monsoon weakened in most parts of the country this month, taking the season's total rainfall to 5 per cent below normal. September rainfall has been 19% lower than normal, except in east and northeast India, where it was 66% in excess. All other regions reported a deficit of 40%-50% this month. The heavy losses in domestic equity markets also weighed on the sentiment of the local currency. Investors remained cautious ahead of macroeconomic data, IIP for July and inflation data for August, which are scheduled to be released later in the day.  On the global front, yen strengthened against dollar on Monday amid risk aversion, with hawkish comments from several Federal Reserve officials, a sell-off in bond and oil markets and renewed concerns about North Korea's nuclear test weighted on investor sentiment. Finally the rupee ended at 66.92, weaker by 24 paise from its previous close of 66.68 on Friday.


The FIIs as per Monday'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 4040.24 crore against gross selling of Rs 4377.39 crore, while in the debt segment, the gross purchase was of Rs 2120.15 crore with gross sales of Rs 1690.46 crore.


The US markets recovered from the lows but still ended the last session notably lower on continued uncertainty about the outlook for interest rates amid lack of lack of major U.S. economic data for the day. The Asian markets have made mostly a lower start and some indices are again down by half to one percent on dollar strength with prospect of global central banks turning less accommodative. The Indian markets before going for a holiday had extended their sharp losses and major benchmarks lost over one and half a percent in the last session. Today, the start is likely to remain somber on weak global cues and traders will be reacting to mixed set of economic numbers announced on Monday after the market hours, while on positive side India's annual retail inflation eased by 100 basis points to 5.05 percent in August. While on the negative, factory output again dipped to a negative growth of (-)2.4 percent in July from an expansion of 1.95 per cent in the month before, dragged down by a negative growth of (-)3.4 percent in the manufacturing sub-index, which enjoys the maximum weight in the main index. Meanwhile, India Ratings and Research has said that the sharp fall in retail inflation in August has increased the chances of monetary easing by the central bank. The rate sensitive sectors are likely to see some action on hopes of rate cut. Markets may get some support with a survey report stating that implementation of Goods & Service Tax (GST) will lead to increased tax compliance and attract more foreign direct investments across sectors due to tax transparency and ease of doing business. There will be some buzz in oil & gas sector too, as the global rating agency Fitch ratings has said that after growing at a robust 7.8 percent in first quarter, India's fuel consumption growth is likely to moderate at around 5-6 per cent in the current fiscal.


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Yes Bank





  • Tata Steel has registered 35.29 % rise in its net profit at Rs 575.43 crore for the quarter as compared to Rs 425.34 crore for the same quarter in the previous year.
  • Wipro, has partnered with Israel-based IntSights Cyber Intelligence to bolster and expand its 'Threat Intelligence as-a-Service offeing'.
  • M&M has launched the New Bolero with the mHAWK engine. This has been christened - The New Bolero Power.
  • SBI has opened 'SBI in Touch' branch at Gandhi Nagar in Vellore.
  • Tata Motors Group global wholesales in August 2016, including Jaguar Land Rover, were at 86,288 vehicles, higher by 16%, over August 2015.
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