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NSE Intra-day chart (16 March 2016)
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Market Commentary 17 March 2016
Markets to extend the gains with a strong start


Indian benchmark indices witnessed a smart recovery in the second half of the session and ended the day in the green, however the trade remained volatile throughout the day. Investors took some encouragement with Standard & Poor's report that continued low oil prices will boost spending in India and help mitigate fiscal and current account deficits. According to the S&P report, India still leads the pack in terms of Asia Pacific GDP growth, but 2016 is shaping up as a year of reckoning on the policy front. Some support also came with the report that Foreign Direct Investment in the country increased by 29 per cent for the 15-month period -- ended December last year -- after the launch of ‘Make in India' initiative.  However, market remained under pressure for most part of the session on report that India's merchandise exports contracted for the 15th month in a row in February amid tepid global demand and a volatile global currency market. Exports fell 5.6% in February from a year earlier to $20.73 billion, the slowest decline since December 2014 when shipments fell 3.77%. Market participants also remained cautious with the report that Agriculture sector, which provides livelihood to over 50% of the workforce in the country, grew by an average 1.6 per cent per annum in first four years of the ongoing Five Year Plan (2012-17), as against the targeted 4 per cent annual growth due to lower production. Meanwhile, metal and mining stocks dropped on the back of decline in global commodity prices, while the gold and jewellery shares reeled under pressure on report that gold imports in February declined 29.49% to $1.39 billion. Some weakness was also witnessed in fertilizers stock after the Ministry of Chemicals & Fertilizers made it mandatory for fertilizer companies to print the MRP and available subsidy on each bag of P&K fertilizers. On the other hand, banking stocks witnessed some strong buying as sharp decline in the consumer inflation and still negative wholesale inflation in February raised expectations of a rate cut by the central bank. On the global front, Asian markets ended mostly in green, while European equities traded firm in early deals. Back home, the frontline gauges managed to pare the early losses and rose above in the dying hours of trade, tracking firm trade in the European markets. Finally, the BSE Sensex gained 131.31 points or 0.53% to 24682.48, while the CNX Nifty rose 38.15 points or 0.51% to 7,498.75.


The US markets closed higher on Wednesday, with the S&P 500 and Dow reaching 2016 highs after the Federal Reserve kept its key interest rates unchanged and downgraded its forecast for the number of rate increases to two in 2016 from an earlier projection of four. The Federal Reserve left the target range for its federal funds rate unchanged at 0.25 percent to 0.5 percent for the second time during its FOMC meeting held in March 2016. Policymakers stated that economic activity has been expanding at a moderate pace but lowered GDP growth and inflation estimates for this year. GDP growth outlook for 2016 was lowered to 2.2 percent from 2.4 percent in December projection. For 2017 it was cut to 2.1 percent from 2.2 percent, while for 2018 was left unchanged at 2 percent. PCE inflation is expected to be 1.2 percent this year, lower than 1.6 percent in the December projection while estimates for 2017 and 2018 were left unchanged at 1.9 percent and 2 percent respectively. On the economy front, the construction on new houses rose in February and stood to a five-month high, led by the biggest increase in single-family units in nine years. Housing starts climbed 5.2% last month to an annual pace of 1.18 million. The Dow Jones Industrial Average added 74.23 points or 0.43 percent to 17,325.76, the Nasdaq was up 35.30 points or 0.75 percent to 4,763.97 while, the S&P 500 gained 11.29 points or 0.56 percent to 2,027.22. 


Crude oil made a strong come back and surged over 4 percent on Wednesday, as the dollar fell precipitously on Wednesday afternoon after the Federal Reserve unexpectedly lowered its interest rate forecast for the remainder of 2016. Meanwhile, the US Energy Information Administration (EIA) said that US commercial crude oil inventories increased by 1.3 million barrels for the week ending March 11. Benchmark crude oil futures for April delivery surged by $2.00 or 4.61 percent to $38.61 a barrel after trading in a range of $36.62 and $38.62 a barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery closed at $40.24, up $2.04 or 3.90 percent on the ICE.


Snapping its two-days losing streak, Indian rupee bounced back against dollar on Wednesday due to selling of American currency by banks and exporters. Besides, equity markets which turned positive at the end of the session also buttressed the domestic currency. However, gains remained capped with the report that Indian exports dipped 5.66% in February to $20,738.60 million, against $21,983.43 million in February 2015, due to contraction in shipments of petroleum and engineering goods amid tepid global demand. Meanwhile investors maintained a cautious approach awaiting the outcome of the two-day US Federal Reserve policy meet later in the day to provide guidance on the risk of US rate hikes this year. On the global front, yen came under pressure after Bank of Japan Gov. Haruhiko Kuroda commented that he sees more room to cut interest rate even further into negative territory. Finally, the rupee ended at 67.25, 14 paise stronger from its previous close of 67.39 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity and in debt segments both. In equity segment, the gross buying was of Rs 3822.82 crore against gross selling of Rs 3850.23 crore, while in the debt segment, the gross purchase was of Rs 960.17 crore with gross sales of Rs 966.38 crore.         


The US markets ended higher in last session, reacting to the dovish comments from the US Fed after it announced its widely expected decision to leave interest rates unchanged in a range from 0.25 percent to 0.50 percent. The Asian markets have made a positive start with some of the indices trading higher by over a percent, tailing the gains in the US markets and supported by surge in crude and commodity prices. The Indian markets after remaining weak in early deals moved higher in the final hours and major bourses gained around half a percent for the day. Today, the start is likely to be strong and the markets will be extending the gains, as the Federal Reserve has scaled back its projection for interest-rate hikes, keeping its policy rate unchanged at the end of its two-day rate-setting meeting and has once again ignited the call of rate cut from the Reserve Bank of India. Meanwhile, markets will also be reacting to the government's introduction of a bill in the Lok Sabha to further amend the Companies Act as part of efforts to address difficulties faced by stakeholders and improve the ease of doing business in the country. There will be buzz in the infra and aviation stocks, as President Pranab Mukherjee has said that India is planning to invest over $120 billion in the development of airport infrastructure and aviation navigation services over the next decade. Also, Minister for Civil Aviation P. Ashok Gajapathi Raju has said that the government will come out with a new civil aviation policy by next month. There will be some action in the PSU oil marketing companies too, as the oil marketing companies have increased the prices of petrol by Rs 3.07 per litre, while the prices of diesel has been hiked by Rs 1.90.


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Bank of Baroda






  • State Bank of India, the country's largest public sector lender, has partnered with Uber to provide its drivers with vehicle finance.
  • Bank of Baroda, one of the country's leading public-sector banks, has opened a new branch in Kadapa district in the state of Andhra Pradesh.
  • Cairn India is seeking higher price to extract more oil from its ageing Rajasthan block just like government has allowed a premium for gas fields in challenging regions like the deep sea.
  • Reliance Industries' subsidiary Reliance Jio Infocomm has entered into an Intra-Circle Roaming agreement with the Government-owned telco body BSNL.
  • ICICI Bank has unveiled the country's first contactless mobile payment solution to enable its credit and debit customers make in-store contactless payments by just waving their smartphones near an NFC-enabled merchant terminal.
News Analysis