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NSE Intra-day chart (18 November 2016)
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Market Commentary 21 November 2016
November F&O expiry week to see a flat start


Indian benchmarks carried forward their southbound journey for yet another session on Friday, as overall sentiment remained subdued after the US Federal Reserve chief indicated it may hike interest rates next month, leading to acceleration in capital outflows by foreign funds. Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) have already sold equity shares worth over $1 billion in the past few trading days. Prospects for a rate hike next month also got a boost from data on Thursday showing first-time applications for US unemployment benefits tumbling to a 43-year low last week and housing starts surging to a nine-year high in October. Besides, the rupee taking a sharp plunge against the dollar on Friday also dampened the market sentiments. Further, the demonetisation effect continue to weigh on the bourses as it started affecting not just demand but also the supply chain with cash crunch hitting the farmers. Prices of few key commodities have fallen considerably since the move was announced amid drying up of demand. Also, fears have risen regarding production of the key commodities as farmers are not getting enough cash to buy seeds for winter crops. However, downside remained capped 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. Meanwhile, sugar stocks moved higher in otherwise range bound market on the report that India's sugar production has increased marginally by nearly two per cent to reach 7.87 lakh tonnes compared to last year, mainly on account of early crushing in states like Uttar Pradesh and Karnataka. Finally, the BSE Sensex declined 77.38 points or 0.30% to 26150.24, while the CNX Nifty dropped 5.85 points or 0.07% to 8,074.10. 


The US markets closed lower on Friday, as dollar continued to charging higher and investors booking profits on the recent rally pressuring major indexes. A stronger dollar can erode the profitability of large-cap companies, who depend more on exports. On the economy front, the US is growing at a moderate pace and is likely to do so through early 2017, according to an index that measures the nation's economic health. The leading economic index rose 0.1% in November after a 0.2% gain in the prior month. A measure of current economic conditions rose 0.1%. A lagging index increased 0.2%. The LEI is a gauge of 10 indicators designed to signal business-cycle peaks (expansions) and valleys (recessions). Meanwhile, St. Louis Fed President James Bullard stated that the US election has not changed the Federal Reserve's outlook for next year as the actual impact of any policy changes would take effect from 2018 and 2019. The Dow Jones Industrial Average lost 35.89 points or 0.19 percent to 18,867.93, Nasdaq was down 12.46 points or 0.23 percent to 5,321.51, while S&P 500 dropped 5.22 points or 0.24 percent to 2,181.90.


Crude oil futures on Nymex moved higher on Friday despite the industry data showing the US rig count jumped to its highest since January. Oil Services firm Baker Hughes reported that US oil companies added 19 drilling rigs this week, the biggest increase since July 2015. The count rose to 471 in the last week. Traders were hopeful of OPEC to follow through on plans to curb production after much wrangling between member nations. Though, Iraq has asked to be exempted from output curbs, arguing it is still trying to regain market share lost when sanctions were imposed in the 1990s during the Saddam Hussein era, and that it needs to keep up a costly battle against Islamic State. Benchmark crude oil futures for December delivery gained $0.27 or 0.6 percent to close at $45.69 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for January delivery declined by $0.27 or 0.51 percent to $46.76 a barrel on the ICE.


Indian rupee breaching 68 mark ended considerably weaker against dollar on Friday as comments by the US Federal reserve chair Janet Yellen, raised concerns regarding a possible hike in interest rates in December policy review. Sentiments weakened further with the private report stated that cash crunch arising out of demonetisation is expected to paralyse economic activity in the short-term, bringing down the 2017-18 GDP growth to 5.8 per cent. On the global front, yen slipped further against the surging dollar, raising prospects for better-than-expected exporters' earnings.Finally, the rupee ended at 68.12, 29 paise weaker from its previous close of 67.83 on Thursday.


The FIIs as per Friday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4593.92 crore against gross sell of Rs 5541.74 crore, while In the debt segment, the gross purchase was of Rs 829.32 crore with gross sales of Rs 2563.37 crore. 


The US markets made a modestly lower closing in last session, showing a lack of direction, though selling pressure remained relatively subdued, limiting the downside, despite report from Conference Board showing a slight increase by its index of leading economic indicators. The Asian markets have made a mixed start with some indices trading marginally in red on rising concern that Federal Reserve will pull the trigger on a rate hike in December. The Indian markets continued the declining trend in the last session and snapped another week in red. Today, the start of the November F&O series expiry week is likely to be flat-to-cautious tracking mixed global cues; however volatility can be seen during the day. Traders will be a bit concerned with the Centre and states on Sunday failing to reach a consensus on who will control which set of assessees under GST. The said meeting which came ahead of the formal meeting of the all powerful GST Council on November 25, was held after the Centre and states were deadlocked over the issue at two previous meetings. The GST Council will meet again on November 25 to work out the modalities. Also, a private report has stated that India's economic growth is expected to fall by up to 1 percentage points over the next 12 months in the wake of demonetisation, while longer-term gains will depend on follow-up reforms. There will be some buzz in the export oriented stocks, as the Commerce and Industry Minister Nirmala Sitharaman has called a meeting of export promotion councils and other sector representatives to discuss the impact of demonetisation. There will be lots of important result announcements that will be keep the markets buzzing.


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  • Infosys has made an investment of DKK 14.92 million from its Innovation Fund in UNSILO.
  • Reliance Industries has inked a global partnership agreement with GE in the Industrial IOT space.
  • NTPC has shut down all units of Badarpur Thermal Power Station till January 31, 2017.
  • Coal India's arm Northern Coalfields has awarded Rs 1,469.84 crore project to DBL-DECO, a joint venture of Dilip Buildcon.
  • Mahindra First Choice services, the used car services arm of Mahindra & Mahindra, is planning to sell a portion of its stake to raise up to $50 million.
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