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NSE Intra-day chart (17 May 2016)
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Market Commentary 18 May 2016
Markets to witness some consolidation with a soft start


Indian benchmarks despite getting a promising start and surging to over one percent in second half of the session failed to maintain the lead and ended with gain of just over quarter a percent. Sentiments were sanguine from the start of trade with Finance Minister Arun Jaitley exuding confidence in getting the GST Bill passed in the upcoming monsoon session. Jaitley said that he has spoken to the chief ministers of all states, including those ruled by the UPA and the Congress, and they are a "strong supporter" of the idea. Besides, exit polls which indicated BJP emerging victorious in the Assam assembly polls also boosted investor sentiment. The actual results would be declared on May 19, 2016. Market participants also got some encouragement with the India Meteorological Department's announcement that the late arrival of the monsoon will not delay crop sowing and that rains are expected to make rapid progress after their arrival around June 7, 2016. Firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments.  However, investors remained cautious on the report that inflation based on wholesale prices accelerated in April for the first time in 18 months, reinforcing the likelihood that the Reserve Bank of India (RBI) will hold interest rates steady next month. On the global front, Asian markets ended mostly higher on Tuesday, while the European stock markets too started the session on firm note. Back home, the markets moved higher in the morning trade as investors were largely influenced by the supportive leads from Asian markets. The frontline indices soon gathered momentum and traded with over half a percent gains through the morning session of trade. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session's highest levels. However, an intense profit booking in dying hour of trade ensured that the key indices shut shops off the intraday highs. Finally, the BSE Sensex surged 103.34 points or 0.40% to 25756.57, while the CNX Nifty rose 30 points or 0.38% to 7,890.75.


The US market slipped on Tuesday, after Federal Reserve officials hinted that interest rates could be raised as early as June. Atlanta Fed President Dennis Lockhart and San Francisco Fed President John Williams stated that the Fed's decision on whether to raise rates at the June 14-15 meeting hinges on the data. Lockhart added that June certainly could be a meeting at which action could be taken. On the economy front, industrial production in April grew at the fastest monthly rate in 17 months, bouncing back after two straight monthly declines as auto production rebounded and cooler temperatures boosted utility output. The industrial production grew 0.7% in April. Revisions to prior months were largely offsetting. March's decline was revised to a steeper 0.9% fall from an initially reported 0.6% drop, but February's output was revised up to a 0.2% decline from the previous estimate of 0.6% decline. Capacity utilization rose to 75.4% in April from 74.9% in the prior month. Construction on new houses rebounded in April after a sharp dip in the prior month, but a slowdown in building permits suggest work on new properties could taper off from last year's double-digit pace. Housing starts climbed 6.6% last month to an annual pace of 1.17 million. In March, starts were revised to a 1.1 million rate. The Dow Jones Industrial Average lost 180.73 points or 1.02 percent to 17,529.98, Nasdaq dropped 59.73 points or 1.25 percent to 4,715.73, while S&P 500 was down by 19.45 points or 0.94 percent to 2,047.21.  


Crude oil futures moved higher on Tuesday to highest level since October on speculation that the global supply glut will soon evaporate. Though crude traded in a tight range after surging more than 3% in last session, amid production disruptions in Nigeria, increased political instability in Venezuela and a bullish note to investors by Goldman Sachs Group Inc. Traders awaited the release of the American Petroleum Institute's weekly inventory report for signals on whether domestic storage capacity could begin to level. Benchmark crude oil futures for June delivery ended up by $0.59 or 1.24 percent to $48.31 a barrel after trading in a range of $47.75 and $48.42 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $49.32, up $0.34 or 0.69 percent on the ICE.


Indian rupee surrendered its early gains and ended weaker against dollar on Tuesday on mild demand for American currency from the banks and importers. The domestic currency has extended its weakness for the fourth straight session. Investors even ignored the Finance Minister Arun Jaitley's statement that he is confident in getting the GST Bill passed in the upcoming monsoon session. However, dollar's weakness against other currencies and gains in local equity market restricted the fall of rupee to some extent. On the global front, yen hit a 2-1/2-week low on Tuesday as a move up in oil prices boosted risk appetite, and as investors worried that after giving several warnings, Japanese officials would intervene to weaken the yen. Finally, the rupee ended at 66.87, 7 paise weaker from its previous close at 66.80 on Monday.


The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity, the gross buying was of Rs 3869.79 crore against gross selling of Rs 3966.30 crore, while in the debt segment, the gross purchase was of Rs 585.34 crore with gross sales of Rs 1025.11 crore.            


The US markets suffered sharp sell-off in last session, offsetting the rally that was seen in the previous session, with the Dow falling to its lowest closing level in well over a month. Traders even ignored Labor Department report showing a slightly bigger than expected increase in consumer prices in the month of April. The Asian markets have made mostly a lower start, as better-than-expected data in the U.S. and Japan fueled speculation their central bank policies will be less accommodative than was previously envisaged. While the Japanese market was trading higher after growth of the nation beat estimates, lessening need for stimulus. The Indian markets despite some choppiness in the final hours managed to end the last session with decent gains. Today, the start is likely to be a bit somber on weak global cues and the markets may lose some strength in early trade, on concern of a Fed rate hike after some officials suggested that two rate hikes may be warranted this year. There will be buzz in the markets with the government forming a five-member committee under former revenue secretary N K Singh to review the working of the 12-year old FRBM Act and examine the feasibility of a fiscal deficit range instead of a fixed target. Some support to the markets can come with a Nielsen survey that Indian consumers were the most confident in the world in terms of job prospects, personal finances and concerns in the first quarter of 2016 with their confidence index touching a nine-year high during the period. There will be buzz in the PSU banking stocks, especially in State Bank of India (SBI) and its listed associate banks after the central board of SBI passed a resolution to seek the government's nod to start negotiating the merger of its five subsidiary banks and Bharatiya Mahila Bank (BMB) with itself. There will be lots of earnings announcements too to keep the markets in action.


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Tata Motors






  • TCS and Siemens are leveraging their longstanding partnership to expand and enhance the delivery of big data analytics to the global manufacturing industry.
  • Wipro has entered into a partnership with Xactly Corporation for employee and sales performance management.
  • Axis Bank has launched India's first multi-currency, cobranded forex prepaid card that facilitates both international and domestic usage while rewarding customers with unlimited miles on every spend.
  • In a bid to make 3G/4G more affordable, Idea Cellular has slashed prices of 3G/4G night surfing data packs by upto 50%.
  • NTPC and Coal India have signed an agreement to form a Joint Venture Company to take up the revival of fertilizer plants of Fertilizer Corporation of India located at Sindri and Gorakhpur by setting up an ammonia urea plant at each location.
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