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NSE Intra-day chart (21 January 2016)
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Market Commentary 22 January 2016
Markets to bounce back on positive global cues

It turned out to be a lackadaisical performance from the benchmark indices on Thursday as they failed to snap the session in the green territory and settled below the neutral line. Markets closed at their lowest level in 20 months due to risk aversion as crude oil resumed its slide and put pressure on Asian markets. Sentiments remained down-beat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1325 crore on January 20, 2016. Furthermore, weakness in rupee, too was weighing down the sentiments, which after a good start has breached the 68 per dollar mark. However, losses remained capped with Finance Minister Arun Jaitley's statement that India is gradually transforming most of its taxation laws for a greater degree of stability and predictability. He also stressed that the proposed Goods and Services Tax (GST) is a major step in this direction. Moreover, with global headwinds hitting emerging markets as well, Finance Minister said volatility has become a global norm, but India can certainly grow at 8-9 per cent in a friendlier global climate. Some support also came with report that India is likely to remain an attractive destination for investors given its relative macro outperformance and the country is likely to clock a GDP growth rate of 7.5 per cent this fiscal.  On the global front, after getting a respite in the morning trades, Asian markets erased all their gains to end lower on Thursday, while European markets were oscillating between negative and positive zone in early deals. Back home, the benchmarks got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the 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 noon session, tracking weakness in rupee. In late afternoon session, the indices tried hard to move back into the positive territory and even got there but only for a brief period as investors took the opportunity to cash in on the bounce back. The bourses finally extended the declining run for the second session but finished way above the session's lows. Finally, the BSE Sensex declined by 99.83 points or 0.41% to 23962.21, while the CNX Nifty ended down by 32.50 points or 0.44% to 7,276.80.


The US markets closed higher on Thursday, as a sharp rebound by oil futures helped the main indexes rebound from a Wednesday rout that had pushed them below their August lows. On the economy front, the number of Americans applying for unemployment benefits in mid-January reached seven-month highs, perhaps a sign that the rate of layoffs in the US has risen slightly from record lows. Initial jobless claims climbed a seasonally adjusted 10,000 to 293,000 in the seven days stretching from January 10 to January 16. That's the highest level since last July. Initial claims are still at very low levels - any number below 300,000 is viewed as evidence of a strong labor market. And other gauges such as the more valuable US monthly employment report show that hiring is still going strong. The Dow Jones Industrial Average added 115.94 points or 0.74 percent to 15,882.68, the Nasdaq was up 0.37 points or 0.01 percent to 4,472.06 while the S&P 500 gained 9.66 points or 0.52 percent to 1,868.99. 


Crude oil futures bounced back and rallied around 5 percent on Thursday as traders bet the recent collapse in energy prices was overdone. Traders even overlooked data showing another large build in US oil inventories, as dovish comments from Mario Draghi on the possibility of further easing measures provided energy traders with an opportunity to cover record short positions. Meanwhile, the Energy Information Agency (EIA) said that US commercial crude oil inventories rose by 4.0 million barrels for the week ending on January 15. Benchmark crude oil futures for March delivery settled up $1.20 or 4.25 percent to close at $29.57 a barrel after trading in a range of $27.88 and $30.23 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for March delivery gained $1.39 or 4.91 percent to $29.27a barrel on the ICE.


Indian rupee extending its weakness for second straight day depreciated against dollar on Thursday on heavy bouts of demand for the American currency from the banks and importers. Besides, a massive fall in the local equity market and higher dollar overseas also hit the rupee sentiment. Investors overlooked the Finance Minister Arun Jaitley's statement that India is gradually transforming most of its taxation laws for a greater degree of stability and predictability.  On the global front, dollar was higher against the major rivals breaking off from one-year low against the yen on Thursday as crude oil prices bounced. Finally, the rupee ended at 68.03, 7 paise weaker from its previous close of 67.96 on Wednesday.


The FIIs as per Thursday's data were net sellers in equity and in debt segments both. In equity segment, the gross buying was of Rs 3888.71 crore against gross selling of Rs 5084.56 crore, while in the debt segment, the gross purchase was of Rs 463.64 crore with gross sales of Rs 698.31 crore.     


The US markets ended higher in last session, though off their day's high. Stocks regained ground after falling sharply over the past several sessions mainly on the back of bargain hunting and reacting to the latest monetary policy announcement from the European Central Bank. The Asian markets have bounced back with most of them showing good surge on prospect of an expansion in central bank stimulus. Japanese market has taken the lead following the dovish comments overnight from ECB president Mario Draghi and the rebound in oil prices. The Indian markets in volatile last session pared all the early gains to end lower by around half a percent. Traders lacked any trigger and confidence to hold the gains. Today, the last session of the tumultuous week is likely to start in green, with markets getting support from the surge in the global indices after ECB president hinted at further stimulus for the euro region in March. Traders will also be getting some encouragement with a survey released on the sidelines of WEF Annual Meeting that has ranked India 22nd on an inaugural list of the world's best countries. About India, the report said the country faces its fair share of international and domestic challenges. Markets will also get some support with the UN's trade agency UNCTAD's report that Foreign Direct Investment (FDI) flows into India nearly doubled in 2015, while the US emerged as the top host country for FDI last year. Meanwhile, Finance Minister Arun Jaitley has said that the Indian economy needs some multiple engines of growth, while the focus for the government now is on reviving private investments. Regarding the proposed Goods and Services Tax Bill pending in the Rajya Sabha, Jaitley has said that the GST legislation would go through as the numbers in India`s upper house of parliament will change favourably soon. Result announcements will once again keep the markets buzzing and scrip specific actions based on earnings will be seen.


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  • ICICI Bank has inaugurated its first full service branch at Sandton at Johannesburg in South Africa.
  • Mahindra & Mahindra's Holiday Club Resorts Oy, has increased its stake in Saimaa Gardens Arena Oy, Finland, from 24% to 100%.
  • AXIS Bank has registered a rise of 14.50% in its net profit at Rs 2175.3 crore for the quarter under review as compared to Rs 1899.76 crore for the same quarter in the previous year.
  • Tata Steel has signed agreement with the Quebec government to develop iron ore deposits in the Canadian province, a move that can help the steelmaker reduce its raw material costs.
  • Tata Power, India's largest integrated power company has introduced its digital interface by launching 'Tata Power Suraksha', a safety mobile app for its employees.
News Analysis