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NSE Intra-day chart (19 September 2016)
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Market Commentary 20 September 2016
Markets to make a cautious start on weak global cues


The Indian equity markets witnessed a lack-luster and volatile day of trade on Monday after showing firm trend in Friday's session. Uncertainty over monetary policies has helped reignite volatility in global markets as well as the local markets, with traders split over what action the BOJ will undertake in its review Wednesday, while bets on an interest-rate hike from the Fed this week remain somewhat strong as inflation data for August rose more than projected. Back home, investor got some comfort  with DIPP Secretary Ramesh Abhishek's statement that implementation of the goods and services tax (GST) is bound to be a game changer for India's manufacturing sector and will enhance ease of doing business in the country. some support also came with report that Finance Ministry officials are expected to pitch a ratings upgrade to Moody's by stressing upon the various reform initiatives taken by the Narendra Modi government, including the GST, bankruptcy code, and inflation targeting through the monetary policy committee, among others. Meanwhile, good buying was observed in metal counters, as the Union Steel Minister Chaudhary Birendra Singh claimed that the country will be ranked after Japan and America in steel production in December this year as a result of the Prime Minister's various initiatives like Skill India, Startup India and Make in India. Shares of select textile companies also gained traction on expectation of pick-up in sales in coming months in light of good monsoon, seventh pay commission payouts and festive season. Tyre manufacturers like MRF and Ceat jumped more than 6 percent each on expectation of a lower natural rubber prices that could improve the profit margin of tyre companies as it accounts around 40 percent of input cost. On the other hand, mild selling was witnessed in select pharma stocks on the report that the government slashed prices of 10 more drugs while bringing eight new medicines, including paracetamol, under price control for the first time in its bid to cap cost of over 800 plus formulations to make them affordable. Finally, the BSE Sensex ended up by 35.47 points or 0.12% to 28634.50, while the CNX Nifty gained 28.55 points or 0.33% to 8,808.40.


The US markets closed flat with negative bias on Monday, in a volatile session ahead of the start of a pair of closely watched central-bank policy meetings. Earlier in the session, gains in crude-oil futures and a report showing a surge in home-builder confidence appeared to help lift the equity benchmarks, but those advances evaporated late in the day. Market participants mostly focused on the Federal Reserve's policy meeting beginning Tuesday. The vast majority have ruled out a possible rate increase at this point. CME Group's FedWatch tool indicates a 12% probability of a September rate increase. Apart from the Fed meeting, investors are also fretting about announcements from the Bank of Japan, which is holding its two-day policy meeting during the same period as the Fed. On the economy front, home builder confidence surged in September to match its highest reading in a decade. The National Association of Home Builders' index jumped six points to 65 in September. The Dow Jones Industrial Average lost 3.63 points or 0.02 percent to 18,120.17, Nasdaq dropped 9.54 points or 0.18 percent to 5,235.03, while S&P 500 was down 0.04 points to 2,139.12. 


Crude oil futures moved higher on Monday, trimming last week's steep losses on hint from Venezuela that OPEC members and other major oil producers could agree to a deal to freeze output, and as clashes in Libya disrupted attempts to restart crude exports from key ports. Benchmark crude oil futures for October delivery gained $0.27 or 0.6 percent to close at $43.30 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery was up by $0.40 or 0.8 percent to $46.17 a barrel on the ICE.


Indian rupee ended marginally higher on Monday due to selling of American currency by banks and exporters. The local currency got some support with report that Finance Ministry officials are expected to pitch a ratings upgrade to Moody's by stressing upon the various reform initiatives taken by the Narendra Modi government, including the goods and service tax, bankruptcy code, and inflation targeting through the monetary policy committee, among others. Besides, increased foreign fund inflows in the domestic market coupled with dollar weakness against some other currencies overseas, also helped the rupee value against the dollar. On the global front, dollar fell from a two-week high on Monday, with a stronger oil price the chief theme in a market battening down the hatches ahead of central bank policy meetings in Japan and the United States. Finally the rupee ended at 66.97, stronger by1 paise from its previous close of 66.98 on Friday


The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 11087.81 crore against gross sell of Rs 10546.91 crore, while in the debt segment, the gross purchase was of Rs 718.48 crore with gross sales of Rs 207.21 crore.


The US markets continued their lackluster trade and ended modestly in red in the last session. Markets though moved higher in early deals on support of overseas markets strength but lost pace ahead of the Federal Reserve's monetary policy announcement later this week. The Asian markets have made mostly a lower start on decline in oil and amid countdown for the policy decisions by the Bank of Japan and the Federal Reserve. The Indian markets added gains in the last session and the major averages despite coming of the day's high managed to retain their crucial levels. Today, the start is likely to be a bit cautious on somber global cues, though traders will be getting some support with global rating agency S&P projecting India to clock 8% growth over next few years and stating that India's structural reform agenda has maintained strong momentum and should propel growth higher. Traders will also be getting some support with the Finance Ministry setting at rest confusion over levy of excise duty and stating that there is no "legal infirmity" in the notifications issued by the government with regard to the GST Constitution Amendment Act. Meanwhile, the country's long-period monsoon rainfall for the June to September period is heading for a 'normal' performance. In April this year, IMD, the country's state-run weather forecasting agency had said that the country is likely to receive above-normal rainfall, but with just ten days before monsoon comes to a close, the countrywide monsoon deficit stands at 5 per cent. Aviation stocks will be in action on reports that domestic air passenger traffic increased by 23.98 per cent during August to 83.81 lakh, further the data from Directorate General of Civil Aviation (DGCA) showed that the passenger traffic during January-August period grew by 23 per cent. The telecom stocks too will keep buzzing with reports that Seven telecom firms, which have applied to participate in the upcoming spectrum auction beginning October 1, have made earnest money deposit of Rs 14,653 crore to acquire rights to use spectrum in seven frequencies, lower than the deposit of Rs 19,711 crore in February 2015 auctions, when lesser bands were up for grabs.


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  • Bharti Airtel has rolled out over 20,000 units of Aadhaar-based e-KYC solution across India.
  • HDFC Bank has launched its Secure Banking programme at Jabalpur in Madhya Pradesh.
  • Mahindra Agri Solutions, a 100% subsidiary of Mahindra & Mahindra, has inaugurated its first Saboro Lounge in Mumbai.
  • NTPC has entered into a pact with Energy Efficiency Services to implement energy efficient LED lighting solutions for all its projects, stations and offices across the country.
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