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NSE Intra-day chart (20 January 2016)
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Market Commentary 21 January 2016
Markets to see some bounce back with a positive start

In a harrowing day of trade Indian markets suffered brutal sell-off, it was only the last hour recovery that helped the markets cap their losses otherwise Wednesday could have proved one of the worst trading day for the markets, after Sensex slumped nearly 650 points to slip below the psychological 24,000 mark for the first time since May 16, 2014. Bulls that were in action in last session were not even in picture today, with bears taking the command from the very beginning and the last session gains proved just a dead cat bounce, with markets resuming their declining streak after a day of break. The sell-off came after IMF painted a gloomy picture of the global economy and sharp slowdown in China. Though, IMF retained India's growth forecast at 7.5 per cent for 2016 and 2017 but lowered China's forecast to 6.3 per cent in 2016 and further down to 6 per cent in 2017 and revised down the global growth projection by 0.2 percentage point to 3.4 per cent for 2016.On the domestic front too, sustained capital outflows amid sluggish corporate earnings and domestic demand with weak trend on Asian bourses on renewed worries over global slowing economic growth and falling oil prices kept weighing the sentiments through the day. The delay in economic reforms and high volatility in global markets have led foreign investors to turn net sellers of domestic equities. The rupee weakness too contributed to the fall, rupee breached 68 per dollar mark for the first time since September 4, 2013 on continued foreign fund outflow. On the global front, while the US markets consolidated and ended mixed, the Asian markets resumed the slump, initiating global sell-off once again after crude oil dipped below $28 a barrel, later the European markets joining the sell-off too made a weak start. Back home, there was panic selling in the markets on concerns over the anemic global economic growth. Sensex that fell below 24,000-mark by noon after the feeble start of the European markets, made good recovery in last half hour of trade, recovering more than 200 points from its day's low to protect the 24000 bastion. Some good earnings along with value based buying at lower levels supported the markets in last, however sustained selling pressure in heavyweights after a feeble start of the European markets, weighed on the sentiments and restricted any major recovery. The sell-off was brutal and broad based, with across the sectors selling pressure, with realty, metal, energy and banks suffering severe beating. Finally, the BSE Sensex slumped by 417.80 points or 1.71% to 24,062.04, while the CNX Nifty lost 125.80 points or 1.69% to 7,309.30.


The US markets closed lower on Wednesday, despite trimming heavier losses scored earlier in the session as a modest bounce off session lows by crude-oil prices provided some relief. The stock-market rout came as equities racked up sharp losses world-wide, fueled by oil falling below $27 a barrel and worries over an economic slowdown in China and other developing markets. On the economy front, consumer prices fell again in December owing mostly to falling costs of food and gasoline. The consumer price index declined by seasonally adjusted 0.1% last month. For all of 2015 inflation rose just 0.7%, the second slowest rate in 50 years. The low rate was largely the result of the biggest drop in gasoline prices in more than a decade. The cost of food also tapered off toward the end of the year because of falling prices for agricultural goods. In December, energy prices dropped 2.4% and food costs retreated 0.2%. The Dow Jones Industrial Average lost 249.28 points or 1.56 percent to 15,766.74, the Nasdaq was down 5.26 points or 0.12 percent to 4,471.69 while the S&P 500 dropped 22.00 points or 1.17 percent to 1,859.33. 


Crude oil futures continuing their slump fell to fresh 12-year lows on Wednesday despite paring some of their losses. Investors continued to digest bearish comments from the International Energy Agency (IEA) a day earlier when it warned that oil prices worldwide "could drown in oversupply" if current conditions persist. Crude prices have been in free fall since last summer, when crude oil was hovering above $60.Benchmark crude oil futures for March delivery shed $1.22 or 4.08 percent to close at $28.37 a barrel after trading in a range of $27.57 and $29.75 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for March delivery declined by $0.83 or 2.86 percent to $27.93 a barrel on the ICE.


Indian rupee ended weaker against dollar on Wednesday, due to demand for the greenback from banks and importers. Weakness in the rupee is being attributed to the relentless selling in stock market. Moreover, sustained capital outflows weighed on the domestic unit. After getting a weak opening, rupee breached 68-mark for the first time since September 4, 2013, but pulled back as state-owned banks were spotted selling dollars likely on behalf of the Reserve Bank of India. On the global front, the safe-haven yen soared on Wednesday, as risk appetite soured after crude oil prices fell to near 13-year lows, dragging the dollar to a one-year low with investors trimming the chances of more tightening by the Federal Reserve. Finally, the rupee ended at 67.96, 31 paise weaker from its previous close of 67.65 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 2688.35 crore against gross selling of Rs 3449.78 crore, while in the debt segment, the gross purchase was of Rs 605.79 crore with gross sales of Rs 801.84 crore.     


The US markets ended lower though the major averages clawed back major portion of early losses as buyers looked for bargains late in the session after the Labor Department reported that its consumer price index for December eased 0.1 percent month-over-month. The Asian markets have made mostly a positive start, with some indices rebounding sharply on speculation the selloff that took global equities to the brink of a bear market may have gone too far. The Indian markets despite some late hour recovery went through brutal sell-off in last session and major benchmarks lost over one and half a percent for the day, barely managing to hold their crucial support levels on continued Chinese worries. Today, the start is likely to be in green and good bounce back can be seen despite mixed global cues. Traders will be taking some comfort with Reserve Bank of India Governor Raghuram Rajan's statement that India is affected by the 'same kind of jitters' impacting other world markets, but things will stabilize and people will look at stable emerging markets, including India.  Also, a private report has said that India's current account deficit may narrow to 0.5 percent of GDP in 2016 from 0.7 percent in 2015 owing to lower commodity prices, particularly oil. The report noted that export volumes are likely to remain sluggish on account of weak global demand, while import volumes would rise mainly due to strong domestic demand and real effective exchange rate appreciation. Power sector may see some bounce back, reacting to government's new power tariff policy which allows 100 percent expansion by existing power plants, passing on levies to consumers and purchase of 100 percent electricity produced from waste. Testile stocks too may see some action, as the government has said that it has initiated the process of settlement of Rs 3,000 crore dues related to some 'blackout and left-out' cases which found no mention in the Amended Technology Upgradation Fund Scheme (ATUFS).



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Reliance Industries






  • Yes Bank has inked pact with the London Stock Exchange to develop bond and equity issuance, with particular focus on the relatively untapped sector of Green Infrastructure Finance.
  • Reliance Industries has reported 41.95% rise in its net profit at Rs 7218.00 crore for quarter ended December 31, 2015 as compared to Rs 5085.00 crore for same quarter in previous year.
  • SBI is planning to open 3 new branches at Kaparada, Kommadi, Chinamushidivada in Vizag & another at Balaga in Srikakulam district in Andhra Pradesh by end of March 2016.
  • Coal India will be initially spending Rs 200 crore on technical up-gradation in various areas including electronic fencing of mines on the lines of practices in advanced nations like US and Australia.
  • Diversified group ITC's instant noodles brand Yippee is inching closer to become a Rs 1,000- crore brand, making the most out of the controversy that hit rival Nestle's Maggi.
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