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NSE Intra-day chart (17 February 2016)
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Market Commentary 18 February 2016
Markets to extend the last session gains with a positive start

A session after displaying a distressing performance, Indian benchmark indices managed to pull through a scintillating performance by vivaciously rallying around a percent on Wednesday, thanks to the hefty short covering in the beaten down blue chip counters. Sentiments got some support with the report that the government is likely to meet its fiscal deficit target of 3.9 per cent of the GDP for the current financial year, largely on account of the latest round of excise duty hikes on oil products and marginal compression in expenditure. Furthermore, market participants also got some light with the report that International development banks from South Korea, Japan and Germany have shown interest in funding multibillion-dollar industrial corridors coming up across the country. These belts with special manufacturing clusters and smart cities are expected to spur economic growth.  Some support also came with Union Commerce and Industry Minister Nirmala Sitharaman's statement that the FDI inflows in the country are improving day by day and more and more investments are coming from sectors other than IT and ITeS. However, investor remained cautious with exporters body FIEO's observation after exports fell for the 14th month in a row, that the country may end up with outbound shipments of $260 billion in 2015-16, sharply lower than the $ 310.5 billion mark achieved in the previous fiscal. Market participants also remained concerned with report that foreign portfolio investors (FPIs) selling shares worth a net Rs 964.19 crore on February 16, 2016. Besides, the Indian rupee depreciated to near record lows against the American dollar, forcing the RBI to intervene to stem further falls, also weighing on the sentiment. The rupee dropped to as low as 68.67 to the dollar, not far from a record low of 68.85 hit in August 2013 when India was hit with its worst financial turmoil in the recent times. On the global front, Asian stocks declined, while shares were higher in Europe as oil prices stabilized. Back home, after the subdued opening, the key gauges plunged to lowest point in the day on sharp across the board sell-off. Thereafter started the recovery to the bourses, which kept moving higher slowly but steadily. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session's highest levels in dying moments. Finally, the BSE Sensex surged by 189.90 points or 0.82% to 23381.87, while the CNX Nifty rose 60.20 points or 0.85% to 7,108.45.


The US markets closed higher on Wednesday, allowing the benchmark S&P 500 to post its biggest three-day gain since August. Solid gains came as the minutes from the Federal Reserve's January policy meeting suggested that policy makers are inclined to pause the tightening process due to recent market turmoil. The majority of Fed officials agreed that the best policy would be to wait for additional information about the strength of the economy before making any further attempts to raise interest rates in 2016. On the economy front, wholesale prices picked up more than expected in January, a possible sign that the global glut in commodities and energy may be abating. The producer price index rose 0.1% in January, a much stronger reading than the 0.2% decline expected. The core price index, which strips out volatile categories like food and energy, was up 0.4% for the month and 0.6% compared to a year ago. Meanwhile, US industrial production rose in January after three straight months of declines, buoyed by a strong utilities index and growing manufacturing sector. The Dow Jones Industrial Average added 257.42 points or 1.59 percent to 16,453.83, the Nasdaq was up 98.11 points or 2.21 percent to 4,534.07 while, the S&P 500 gained by 31.24 points or 1.65 percent to 1,926.82.  


Crude oil futures extending their gains surged on Wednesday on report that Iran backed plans by Russia and Saudi Arabia to cap crude oil production at January levels. Meanwhile, Iranian Oil Minister Bijan Zanganeh met counterparts from Venezuela, Iraq and Qatar in Tehran on Wednesday but did not say if Iran would cap output at January's levels in keeping with moves by major producers Russia, Saudi Arabia and Iraq to limit production. It backed the plan without specifying whether it will immediately freeze its own production levels. Benchmark crude oil futures for March delivery surged by $1.62 or 5.6 percent to $30.66 a barrel after trading in a range of $30.64 and $31.23 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $34.52, up $2.35 or 7.28 percent on the ICE.


India rupee wiped off its early losses, but still ended weaker against dollar on Wednesday due to increased demand for the American currency from importers, amid weak cues from Asian currency markets. Besides, dollar's strength against some other currencies overseas also weighed on the rupee. However, gains in equity markets, which despite some choppiness managed a positive close capped some losses. Investors remained cautious with exporters body FIEO's observation after exports fell for the 14th month in a row, that the country may end up with outbound shipments of $260 billion in 2015-16, sharply lower than the $310.5 billion mark achieved in the previous fiscal. On the global front, yen outperformed as a rebound in oil prices fizzled out, underpinning demand for the safe-haven Japanese currency.  Finally, the rupee ended at 68.47, 9 paise weaker from its previous close of 68.38 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyer in debt segment. In equity segment, the gross buying was of Rs 2941.75 crore against gross selling of Rs 3730.46 crore, while in the debt segment, the gross purchase was of Rs 298.17 crore with gross sales of Rs 76.31 crore.        


The US markets extended their rally, moving sharply higher over the course of the trading day in last session as there was report of much bigger than expected increase in industrial production in the month of January. Traders also got support with rise in crude prices on report that Iranian Oil Minister has offered support for a plan to maintain a ceiling on oil production. The Asian markets have made a strong start tailing the surge in US markets, with some of the indices gaining over 2 percent as oil's second day of gains bolstered sentiment. The Indian markets after a choppy trade managed to post gains of around a percent in last session. Today, the start is likely to be extension of the gains amid jubilant global cues. Traders are likely to get some support with Cabinet's approval for the WTO's Trade Facilitation Agreement (TFA) which aims at easing customs procedures to boost commerce. TFA will contain provisions for movement of goods, release and clearance of goods and goods in transit. Also, as Revenue Secretary Hasmukh Adhia has indicated that the Centre will announce a final roadmap for rationalising corporate tax exemptions in the Union Budget 2016-17. The aviation stocks will be in focus, as the senior officials of leading airlines IndiGo, Jet Airways, SpiceJet and GoAir have met Minister of State (PMO) Jitendra Singh demanding level playing field with the foreign and the new airlines in the draft civil aviation policy released last year. There will be some buzz in the pharma stocks too on report that department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers is expected to come out with a new bulk drug policy in less than a month with an objective to grow the Indian pharmaceuticals sector to a $200 billion industry by 2030.


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Tata Motors






  • Idea Cellular has signed agreement with Ericsson to deploy 4G/LTE network in select circles and transform the firm's existing 2G and 3G infrastructures.
  • TCS has launched Digital Reimagination Studio in Santa Clara, designed to help customers and partners rapidly ideate bold new innovations and build industry changing concepts.
  • Bharti Airtel, a leading global telecommunications company with operations in 20 countries across Asia and Africa, has added 25.00 lakh users in January, 2016.
  • South Eastern Coalfields, a subsidiary of the Coal, would be setting up country's largest coal washery with a capacity of 25 million tonnes per annum in Korba district of Chhattisgarh.
  • A consortium of infra majors L&T, Japan-based Sojitz and Gayatri may bag a project of over Rs 4,700 crore for civil construction work of the Iqbalgarh-Vadodara stretch of the Western rail freight corridor.
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