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NSE Intra-day chart (18 March 2016)
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Market Commentary 21 March 2016
Markets to make a flat-to-positive start of the holiday truncated week


Indian equity benchmark indices staged a blockbuster performance on the last day of the week by vehemently rallying over a percentage points in the session, as overseas investors continued pumping money into the emerging markets following the dovish stance by global central banks. Foreign investors have bought a net $1.77 billion of shares so far in March, versus this year's outflows of $1.1 billion. Sentiments got some support with the report that Finance minister Arun Jaitley has proposed fresh amendments to the Companies Act to do away with the restriction of routing funds through only two layers of investment companies as well as seeking government approval for managerial remuneration. Besides, a strengthening rupee which surged to trade at over two-month high of 66.55 against the dollar in early trade, too buoyed the sentiments. Meanwhile, Shares of Sugar companies like Balrampur Chini Mills, Eid Parry and Shree Renuka Sugars rallied after sugar prices jumped to their highest levels in more than a year on Thursday, while Telecom companies like Bharti Airtel and Idea Cellular gained after Supreme Court asked TRAI to consider partial rollback of call drop penalty. Financial stocks gained on hopes that the Reserve Bank of India may soon ease key policy rates. On the other hand, Pharma shares continued to witness selling pressure after the recent ban on over 300 combination drugs by the government. On the global front, Asian markets ended mostly in green, however the European shares opened slightly lower on Friday. Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. 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 275.37 points or 1.12% to 24952.74, while the CNX Nifty rose 91.80 points or 1.22% to 7,604.35.


The US markets closed higher on Friday, buoyed by gains in health-care and financial stocks that helped shares notch a fifth straight week of gains. Both the S&P 500 and the Dow industrials ended in positive territory for the year, while the Dow logged six days of gains in a row - the longest winning streak since early October. On the economy front, the US current-account deficit, a measures of the nation's debt to other countries, fell 3.6% in the fourth quarter to $125.3 billion. The decline stemmed from a smaller trade deficit in goods and secondary income and an increase in the US surplus on services such as financial advice and tourism. Secondary income refers to transfers such as withholding taxes or fines that an economy receives without giving something back. Yet for all of 2015, the current-account deficit climbed 24% to $484.1 billion. The increase reflects the weaker US position in trade last year, when exports softened, a result of a stronger dollar and slower economic growth around the world. The current-account gap in the fourth quarter slipped to 2.8% from 2.9% as a percentage of gross domestic product. The Dow Jones Industrial Average added 120.81 points or 0.69 percent to 17,602.30, the Nasdaq was up 20.66 points or 0.43 percent to 4,795.65 while, the S&P 500 gained 8.99 points or 0.44 percent to 2,049.58. 


Crude oil futures after two days of rally consolidated and pared some gains on Friday, partly due to profit taking and partially after reports indicated that U.S. oil rigs rose last week for the first time in three months. Earlier, the crude prices surged to fresh 2016 yearly highs. Meanwhile, the oil services firm Baker Hughes said US oil rigs rose by one to 387 for the week ending March. 11, halting a 12-week streak of weekly declines, on the other hand the combined rig count fell to 476 last week, as four gas rigs went offline.  Benchmark crude oil futures for April delivery lost $0.60 or 1.49 percent to $39.60 a barrel after trading in a range of $39.52 and $41.20 a barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery closed at $41.70, down $0.34 or 0.82 percent on the ICE.


Indian rupee extended gains for the third consecutive session on Friday due to massive rally in the local equity markets following dovish comments from the US Federal Reserve in its two-day policy meet that concluded on Wednesday. Besides, selling of American currency by banks and exporters also supported the rupee. Sentiment further got some support after Finance minister Arun Jaitley proposed fresh amendments to the Companies Act to do away with the restriction of routing funds through only two layers of investment companies as well as seeking government approval for managerial remuneration. On the global front, dollar was slightly higher against the yen, as investors worried that a sharp rise in the Japanese currency would elicit some kind of intervention from the Bank of Japan. Finally, the rupee ended at 66.50, 18 paise stronger from its previous close of 66.68 on Thursday.


The FIIs as per Friday's data were net buyers in equity and in debt segments both. In equity segment, the gross buying was of Rs 5028.35 crore against gross selling of Rs 4089.14 crore, while in the debt segment, the gross purchase was of Rs 1554.99 crore with gross sales of Rs 398.98 crore.         


The US markets moved higher in the last session and the major averages once again ended the session at their best closing levels in well over two months. The Asian markets have made a mixed start and while the Chinese market has surged amid plans to loosen curbs around margin lending imposed by officials after last year's equity rout, some other indices are in red as crude oil extended decline. The Indian markets surged in last session in a late rally on the back of renewed foreign fund flows and broad-based weakness in the American currency. Today, the start of the holiday truncated week is likely to be mildly in green despite mixed Asian cues, as prospect of a lower interest rate regime has increased significantly with hopes of the Reserve Bank of India (RBI) cutting rates in its monetary policy review on April 5. Though, there will be some cautiousness too in the markets, with the government slashing interest rates on small-savings schemes, including the Public Provident Fund and Kisan Vikas Patra in order to align these administered interest rates closer to the market rates.  However, clearing stance of his ministry, Finance Minister Arun Jaitley has said that the country has to move towards lower interest rates. He articulated that cut on Public Provident Fund (PPF) rates was a right decision by the government and part of routine procedure. There will be some buzz in the telecom stocks on report that the Department of Telecom (DoT) is unlikely to auction the entire spectrum in 700 Mhz as it feels telecom operators may not bid aggressively for the band due to high reserve price. Some buzz can be seen in the gold and jewellary stocks too, as jewellers called off a 19-day strike late on Saturday after the government assured they will not be harassed by the excise department in collecting a new tax.


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  • Hindustan Unilever has inked an agreement for the sale of its rice exports business to LT Foods Middle East DMCC for Rs 25 crore.
  • State Bank of India has unveiled 'SBI Global Ed-Vantage' an overseas education loan for students who wish to pursue higher education abroad.
  • Idea Cellular, one of the biggest cellular carrier of the country, has added 14.63 lakh new mobile subscribers in February, 2016.
  • ICICI Bank is planning to raise funds to finance infrastructure and affordable housing by issuing long-term bonds through debentures.
  • Bharti Airtel, a leading global telecommunications company with operations in 20 countries across Asia and Africa, has added 29.00 lakh users in February, 2016.
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