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NSE Intra-day chart (20 April 2016)
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Market Commentary 21 April 2016
Markets to get a strong start on jubilant global cues


Wednesday's trading session was of consolidation, as the Indian equity indices appeared a bit fatigued and remained in tight range for most part of the day. Nevertheless, the benchmarks managed to extend the winning momentum for the fifth consecutive day of trade, as local sentiments continued to show signs of improvement. Investors took some encouragement with Finance minister Arun Jaitley's statement that India's economic growth could surge to 8.5%, especially if the monsoon is as bountiful as forecast, adding that he hopes interest rates will fall further as prices trend lower. Some support also came with report that India Inc's business optimism index remained stable for the April-June quarter of this year, thanks to a rate cut by the RBI and Government's recent policy reforms. The Dun & Bradstreet Composite Business Optimism Index stands at 81.1 during the second quarter of 2016, an increase of 1.1 per cent as compared to April-June period of 2015. However, market participants remained cautious with the report that India's merchandise exports extending its decline for the sixteen months in row, contracted by 5.47 percent to $22718.69 million in the month of March, as shipments of petroleum and engineering products shrunk sharply due to tepid global demand. Besides, sharp fall in the Asian and European stock markets amid drop in the oil prices also weighed on the sentiment. Meanwhile, shares of air conditioner and air cooler makers edged higher on expectations of good retail air conditioner sales in summer season. Further, metal and mining stocks also surged on recent rally in copper and steel prices in global commodities markets. However, shares of sugar companies declined after the reports that the government was mulling to control sugar prices rise. On the global front, Asian markets ended mostly in red, while European stocks too fell from a three-month high. Back home, after getting a firm start, Indian benchmark indices dropped into the negative terrain sooner than later, lacking any significant upside cues. The indices moved only sideways thereafter but touched intraday lows in the late morning session. However, the frontline gauges managed to pare the losses and rise above the neutral line in the dying hours of trade. Finally, the BSE Sensex gained 27.82 points or 0.11% to 25844.18, while the CNX Nifty rose 0.05 to 7,914.75.


The US markets despite coming off their days high managed a positive close on Wednesday and the Dow and the S&P 500 reached new multi-month closing highs, mainly on substantial rebound in the crude oil prices. Although, Moscow denied reports of a meeting of major oil producers in Russia next month, but there was speculation regarding another effort to freeze production that contributed to the crude price rise and boosting the equities. On economy front, U.S. mortgage applications rose to their highest in about two months as interest rates on 30-year fixed-rate mortgages remained low. The Mortgage Bankers Association reported that its weekly mortgage market index rose to 526.80 in the period ending April 15, up 1.3 percent, while refinancing was up 3 percent. The Dow Jones Industrial Average gained 42.67 points or 0.24 percent to 18,096.27, the S&P 500 was up by 1.60 points or 0.08 percent to 2,102.40, while the Nasdaq was up 7.80 points or 0.16 percent to 4,948.13.  


Crude oil futures surged to the fresh highs of 2016 on buzz of another attempt by oil producers to cut production. Though Russian energy minister cast doubts on the possibility of a subsequent meeting between OPEC and Non-OPEC producers next month in Russia. Traders got encouragement with report of domestic production slumping to an 18-month low and a smaller than expected inventory build last week  that eased ongoing concerns related to the excessive supply glut on global energy markets. Benchmark crude oil futures for June delivery surged by $1.65 or 3.89 percent to $44.12 a barrel after trading in a range of $41.30 and $44.24 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $45.76, up $1.73 or 3.95 percent on the ICE.


Extending its gains for second consecutive session, Indian rupee ended substantially stronger against dollar on Wednesday due to increased selling of American currency by exporters. Besides, gains in local equity markets also supported the rupee. Sentiment remained upbeat as India's trade deficit narrowed to a five-year low of $5.07 billion in March. Further, a fall in the dollar against major world currencies globally after data showed new US home construction slumped in March to the slowest pace since October strengthened the case for the Federal Reserve to go slow in raising interest rates too helped the domestic currency. On the global front, yen rose on Wednesday as a drop in oil prices soured market sentiment, however, euro was flat ahead of the upcoming European Central Bank meeting on Thursday. Finally, the rupee ended at 66.22, 33 paise stronger from its previous close of 66.55 on Monday.


The FIIs as per Wednesday's data were net buyers in equity and in debt segments both. In equity segment, the gross buying was of Rs 6132.80 crore against gross selling of Rs 5092.20 crore, while in the debt segment, the gross purchase was of Rs 2434.39 crore with gross sales of Rs 919.21 crore.          


The US markets managed a positive close, overcoming the profit taking in final hours, supported by energy stocks on rebound in crude oil and some better than expected earnings announcements. The Asian markets have made a jubilant start taking cues from the US markets, barring the Chinese market all the major indices are trading with good gains in early trade, led by the Japanese market, as the yen held near a two-week low amid speculation that the Bank of Japan will expand stimulus at a monetary policy review next week. The Indian markets despite a volatile trade managed a flat closing with a positive bias in last session. Today, the start is likely to be good as the other regional peers are in jubilant mood. There will be some cautiousness too in the market, as RBI Governor Raghuram Rajan talking on euphoria about India being the world's fastest-growing economy has said that India still remains one of the poorest nations in the world on a per capita basis and have a long way to go before we reasonably address the concerns of each one of our citizens. However, Rajan lauded government efforts and said that the current growth rate reflects the hard work of the government. He also said that India should find ways to support higher economic growth on a sustainable basis and not fritter away gains as it did in the past. There will be some buzz in the infra sector stocks, as minister for road transport and highways Nitin Gadkari, under pressure to steer road construction into the fast lane and meet the much-touted 30 km a day target, has set a goal of building 15,000 km of highways this fiscal, two and a half times what was achieved last year. The IT stocks too may see some action after Wipro reported a sequential 0.2% drop in net profit to $337 million for the three months to March. There will be some other important result announcements too, to keep the markets buzzing.


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  • Bajaj Auto is aiming to sell three lakh three-wheelers in the current fiscal, a growth of over 17% over the last fiscal.
  • Tata Power Company has installed a softener exchanger of 15 M3 capacity / hour to improve the performance of waste water recovery system at its Jojobera plant, Jamshedpur.
  • Housing Development Finance Corp has said that it plans to list up to 10 percent of its life insurance joint venture with Britain's Standard Life Plc in an initial public offering.
  • Bharti Airtel will sell more than 5% stake in its tower arm Bharti Infratel through an open market block deal.
  • NTPC has signed a pact with IIT Kanpur for research and development in the areas such as renewable, automation and power system engineering.
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