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NSE Intra-day chart (17 November 2016)
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Market Commentary 18 November 2016
Markets to make a cautious start on mixed global cues


Indian stock markets prolonged the lull for second straight day and finished the session on a dull note, marginally below the neutral line as investors at large remained reluctant to build on long positions, keeping an eye on Parliament's winter session where the government is unlikely to bring three bills related to GST in the coming days. Both Houses of Parliament had a rocky start to the winter session as the government and the Opposition again locked horns over a move to scrap two high-value banknotes that has triggered chaos and confusion across the country. Opposition parties attacked the Centre for the move - aimed at stamping out illegal cash - and said the measure has hit the poor and the marginalized. Negative sentiment and selling pressure have impacted the market during the last 4-5 trading days as companies struggle to gauge the effects of the move on the spending in various sectors of the economy. The severe cash crunch has reduced the spending power of a majority of Indian population, impacting demand-led and consumption stocks in the market. Besides, continued outflow of foreign funds, coupled with negative global cues, too weigh on the sentiment. Foreign Institutional Investors (FIIs) and foreign portfolio investors (FPIs) have sold equity shares worth over $1 billion in the past five trading days. However, investors got some comfort with Moody's Investors Service affirming India's sovereign rating at ‘Baa3' with a positive outlook, saying it expects policymakers to continue reforms to achieve balanced growth and reduce the government's debt load. Moody's further said that India's policy makers have taken important steps to strengthen the country's institutions. Meanwhile, IT stocks continued to witness selling pressure for the second straight sessions after IT industry body Nasscom cut growth guidance for the industry to 8-10 percent in constant currency terms from 10-12 percent. Further, jewellery showed some fine recovery in the last hours of trade as market participants lapped up beaten down but fundamentally strong stocks in the segment. Finally, the BSE Sensex declined 71.07 points or 0.27% to 26227.62, while the CNX Nifty dropped 31.65 points or 0.39% to 8,079.95. 


The US markets closed higher on Thursday, as an improving economic picture and greater clarity on Federal Reserve policy allowed the market's postelection uptrend to continue, putting the S&P 500 and Dow within reach of attaining new record closing highs. In testimony before the House-Senate Joint Economic Committee, Federal Reserve Chairwoman Janet Yellen stated that an interest-rate hike could come relatively soon, further underlining expectations a rate move could come at the central bank's December meeting. While that has long been seen as a likely time for a rate increase announcement, some investors have speculated on the possibility of a delay following the unexpected election of Donald Trump, which injected a measure of uncertainty into economic outlooks. On the economy front, the number of people who applied for unemployment benefits last week sank to a 43-year low, reflecting the strongest labor market since before the Great Recession. Initial jobless claims fell by 19,000 to 235,000 in the week stretching from November 6 to November 12. Meanwhile, construction on new houses surged nearly 26% in October to the highest level in nine years, helped by a spike in multifamily buildings. The Dow Jones Industrial Average added 35.68 points or 0.19 percent to 18,903.82, Nasdaq was up 39.39 points or 0.74 percent to 5,333.97, while S&P 500 edged higher by 10.18 points or 0.47 percent to 2,187.12.


Crude oil futures turned lower on Thursday as the dollar continued to strengthen after US Fed Chair Janet Yellen's testimony stating that Federal Reserve is prepared to raise interest rates. While the Saudi Energy Minister Khalid al-Falih said he was optimistic that the Organization of the Petroleum Exporting Countries will finalize plans to cut production, traders remained skeptical of a deal given Iran's insistence on being exempt from any agreement. Iran's increasing output casts doubt on whether an OPEC deal will be able to clear a persistent global oil glut. Benchmark crude oil futures for December delivery dropped $0.15 or 0.3 percent to close at $45.42 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for January delivery declined by $0.46 or 0.99 percent to $46.03 a barrel on the ICE.


Snapping four days losing streak, Indian rupee appreciated against dollar on Thursday due to increased selling of American currency by exporters and banks. Local currency got some support with Moody's Investors Service affirming India's sovereign rating at ‘Baa3' with a positive outlook, saying it expects policymakers to continue reforms to achieve balanced growth and reduce the government's debt load. Besides, dollar weakness against other major currencies overseas on disappointing US economic data that showing wholesale inflation and industrial production flat in October also supported the domestic currency. On the global front, yen gained against dollar on Thursday after the Bank of Japan announced special buying operations for Japanese government bonds.


The FIIs as per Thursday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 7361.02 crore against gross sell of Rs 9321.27 crore, while in the debt segment, the gross purchase was of Rs 1385.14 crore with gross sales of Rs 8430.25 crore. 


The US markets made a modestly higher in last session, with major averages finishing the session near their best levels of the day, following the release of a batch of largely upbeat U.S. economic data, including a report that housing starts jumped to a nine-year high in October. The Asian markets have made a mixed start after Federal Reserve Chair Janet Yellen signaled an interest-rate hike could be imminent. The Japanese market was trading higher as the yen weakened against the dollar. The Indian markets extended their consolidation mood in last session and once again ended marginally in red with Nifty slipping below the crucial 8100 level. Today, the start is likely to remain cautious amid mixed global cues and worries of US interest rate hike, but some strength can be seen later in the day. Traders will be getting some support with NITI Aayog Vice-Chairman Arvind Panagariya's statement that India can become a $10 trillion economy in the next 15 years, like China did in last one and a half decade. He said there is much scope for India to benefit from Chinese experience in the manufacturing sector and make the country into a robust & steady economy. Also, a private report has said that India's current account deficit is expected to stay comfortable at $ 10.1 billion in this financial year, largely on account of likely demand moderation post the demonetisation move. Meanwhile, in efforts to attract more overseas investments, RBI has allowed foreign portfolio investors (FPIs) to put their money in unlisted corporate debt securities as well as securitised debt instruments. There will be some important earnings announcements to keep the markets buzzing.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Nifty Top volumes



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Hindalco Industries





Axis Bank





  • Yes Bank has inked pact with Crownit to launch digitized meal vouchers.
  • Bharti Airtel has completed the merger of its subsidiary Airtel Bangladesh with Robi Axiata, a unit of Axiata Group Berhad.
  • ITC has concluded the divestment of 100% stake in US-based King Maker Marketing, Inc., USA.
  • Lupin's US subsidiary, Gavis Pharmaceuticals LLC., USA (collectively Lupin) has received final approval for its Hydrocodone Bitartrate and Acetaminophen Tablets.
  • Hindalco Industries is reportedly planning to focus on value added products to increase its profit margins and reduce debt.
News Analysis