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NSE Intra-day chart (15 September 2016)
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Market Commentary 16 September 2016
Markets to extend gains with a positive start


Indian equity markets traded on a sluggish note for most part of the session, but once again managed to eke out modest gains by the end of trade, as the benchmark indices clawed back into the green terrain in the last on getting some supportive leads from the European markets. Sentiments also got some support with report that Prime Minister Narendra Modi has reviewed preparations for roll out of the new Goods and Services Tax (GST) regime, possibly from April 1 next year, with Finance Minister Arun Jaitley and his team making a presentation on the milestones achieved and the road ahead. Adding the optimism among investors, Agriculture Minister Radha Mohan Singh said the country's foodgrain output is expected to touch a record in the ongoing 2016-17 crop year. The government has set a target to achieve a record foodgrains production of 270.10 MT this year. Though, several market participants seems to have adopted a wait-and-watch approach to the global sentiment which is playing between cautious and optimism over the FOMC meet early next week. On the global front, most of the Asian markets remained under pressure during the session, while European markets edged higher in early trade. Back home, after getting a firm start, the local benchmark indices slipped in negative territory in late morning session as investors turned jittery tracking weak Asian cues and overnight losses on Wall Street after crude oil prices eased. Thereafter, the frontline indices traded in tight range near neutral line, altering between positive and negative territory, for most part of the session due to lack of encouraging leads. However, some lower level buying in frontline blue-chip stocks along with supportive leads from European markets helped the indices to end the session on optimistic note. Finally, the BSE Sensex ended up by 40.66 points or 0.14% to 28412.89, while the CNX Nifty gained 15.95 points or 0.18% to 8,742.55. 


The US markets closed considerably higher on Thursday, near their intraday highs, as an Apple-inspired rally in the tech sector helped to lift the broader market following a deluge of macroeconomic reports. The three main benchmarks marked their fourth move of at least 1% in the past five sessions, after more than a month of torpor as volatility escalates in September. The US central bank is widely expected to hold fire next week when it meets, with the CME FedWatch Tool pointing to an only 15% probability of a rate increase. On the economy front, some 260,000 people applied for unemployment benefits in early September week stretching from September 4 to September 10, up 1,000 from the prior week but still near the lowest level in decades. On the other hand, sales at US retailers fell in August for the first time in five months as traffic dropped off for most stores, a sign that third-quarter growth might not be as strong as previously estimated. Retail sales declined a seasonally adjusted 0.3%. The Dow Jones Industrial Average added 177.71 points or 0.99 percent to 18,212.48, Nasdaq gained 75.92 points or 1.47 percent to 5,249.69, while S&P 500 was up 21.49 points or 1.01 percent to 2,147.26. 


Crude oil futures made some recovery on Thursday and nudged higher, taking back some of this week's significant losses, as the outlook for global demand improved a bit as stocks rallied on speculation the Federal Reserve will keep interest rates low through the year. But there was persisting concern about the possibility of a sharp increase of the supply from Libya that kept the prices under check. Libya is working to lift force majeure at its port of Zueitina, indicating that Libyan crude exports could start flowing soon. Benchmark crude oil futures for October delivery gained $0.33 or 0.76 percent to close at $43.91 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery was up by $1.01 or 1.13 percent to $46.37 a barrel on the ICE.


Indian rupee ended a two-week low on Thursday after a Finance Ministry official denied the report stating that the government may discuss a plan to devalue the currency.  Sentiments also remained down with reports that in September, rainfall fell 15 per cent below average, which could mean the season will end up in deficit. Sustained demand for US dollar from banks and importers, also weighed on rupee sentiments. On the global front, yen strengthened against dollar as the Bank of Japan's monetary policy meeting next week took center stage with speculation about possible policy steps swirling, including a focus on negative rates over asset purchases. Finally the rupee ended at 67.02, weaker by 13 paise from its previous close of 66.89 on Wednesday.


The FIIs as per Thursday'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 4624.61 crore against gross selling of Rs 5097.77 crore, while in the debt segment, the gross purchase was of Rs 1895.32 crore with gross sales of Rs 1759.26 crore.


The US markets bounced back and rallied in the last session supported by and easing concern about interest rate hike by the Federal Reserve and surge in the tech sector led by Apple. The Asian markets have made mostly a positive start, though many of the indices are not trading and there was still concern about the strengthening Japan's currency and extended losses in oil amid concern about a glut. The Indian markets made another modestly positive close in last session, with Nifty nearing 8750 level. Today, the start is likely to be in green on positive global cues and traders will be getting some support with report that Prime Minister Narendra Modi targeting to roll out the ambitious GST on April 1 next year, has directed that all steps required in this direction should be completed before that date. He has also said that GST Council would need to have intensive meetings to be able to make timely recommendations relating to its mandate. However, there will be some concern too with the exports declining for the second consecutive month in August by 0.3 percent to $ 21.51 billion due to dip in shipments of products like petroleum and leather. The imports too contracted by 14 percent to $29.91 billion, leaving a trade deficit of $7.67 billion in the month under review. There will be some buzz in the infra sector, as the Union Minister Nitin Gadkari has said that the government will soon launch three expressway projects - Delhi-Amritsar-Katra, Delhi-Jaipur and Vadodara-Mumbai- soon at a cost of about Rs 1,32,000 crore. The PSU oil marketing companies too will be in action, after Petrol price was on Friday hiked by 58 paise a litre while diesel rate was cut by 31 paise per litre in line with international trends.


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  • Tata Steel has commenced export of Tata Ferroshots (granulated pig iron) from its Kalinganagar plant in Odisha.
  • Infosys has entered into an agreement to provide engineering services to Ansaldo Energia, a producer of thermoelectric power plants.
  • SBI has raised Rs 2000 crore through bonds from overseas investors.
  • Maruti Suzuki India has entered into a partnership with Uber India through a Memorandum of Understanding.
  • Tata Power Company's wholly owned subsidiary - Tata Power Renewable Energy has completed the acquisition of 100 percent shareholding in Welspun Renewables Energy and its subsidiaries.
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