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NSE Intra-day chart (21 April 2016)
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Market Commentary 22 April 2016
Markets to make a flat-to-cautious start


 Indian stock markets have prolonged the lull for second straight day and finished the session on a disappointing note, as investors lacked conviction to pile up fresh positions. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory in last lag of trade despite getting off to a gap-up opening. Marketmen looked optimistic for most part of the session as global sentiments remained upbeat and most markets in Asia rallied amid a strong gain in global crude oil prices. However, the sanguinity in local markets was under check as profit booking in IT and rate sensitive Real Estate counters exerted downside pressure on the frontline indices.  Further, investors remained cautious as RBI Governor Raghuram Rajan talking on euphoria about India being the world's fastest-growing economy 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, losses remained capped with the report that Indian business leaders continue to be the most optimistic lot globally about the country's economic outlook for the second consecutive quarter owing to a strong GDP growth, recent policy announcements and regulatory changes. According to the Grant Thornton International Business Report (IBR) a quarterly global survey of 2,500 business leaders across 36 economies, 90% of the respondents in India expressed confidence in the country's economic outlook. Meanwhile, Banking stocks, mainly public sector undertakings (PSU) rallied after a report suggested that the Reserve Bank of India (RBI) trimmed the list of debt-laden companies for loan provisioning in the fourth quarter ended March 31, 2016. On the other hand, IT pack came under pressure after Wipro reported weaker-than-expected earnings in the fourth quarter, Infosys too lost its pace and witnessed profit taking. Further, Realty counter declined after the repot that residential sale in top nine cities declined by 4% to 51,000 units in March quarter of FY2016. On the global front, most of the Asian markets ended on firm note, while the European markets struggled for direction in early trade. Back home, Indian benchmark indices got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. The indices in no time climbed to intraday highs and traded around the psychological 26,000 (Sensex) and 7,950 (Nifty) levels through the early trades. However, the bourses failed to capitalize on the early momentum and slipped to lower levels. Finally, the BSE Sensex gained 36.20 points or 0.14% to 25880.38, while the CNX Nifty declined by 2.70 points or 0.03 to 7,912.05.


The US markets closed mostly lower on Thursday, with Dow once again slipping below the 18000 mark, after showing a lack of direction earlier in the session. The decline was mainly because of profit taking with all the major averages trading at their multi-month highs. Traders even overlooked latest US economic news, including a report from the Labor Department showing that initial jobless claims fell to their lowest level in over forty years in the week ended April 16th. The Labor Department said jobless claims edged down to 247,000, a decrease of 6,000 from the previous week's unrevised level of 253,000. Economists had expected claims to rise to 265,000. Meanwhile, the Philadelphia Federal Reserve released a separate report showing an unexpected contraction in regional manufacturing activity in April. The Dow Jones Industrial Average lost 113.75 points or 0.63 percent to 17,982.52, the S&P 500 was down by 10.92 points or 0.52 percent to 2,091.48 while, the Nasdaq edged lower by 2.24 points or 0.05 percent to 4,945.89.  


Crude oil futures declined on Thursday, reiterating from its yearly highs due to rally in dollar, following dovish comments from European Central Bank president Mario Draghi on the possibility of future interest rate cuts before the end of the year. Also, the Paris-based International Energy Agency (IEA) said it anticipates that oil markets will rebalance by this year, or by the end of next year at the latest. IEA executive director Faith Birol reportedly said that he expects a decline of nearly 700,000 barrels per day in Non-OPEC production, a level which would amount to the sharpest decline in supply over the last quarter-century.  Benchmark crude oil futures for June delivery plunged by $0.95 or 2.15 percent to $43.23 a barrel after trading in a range of $43.08 and $44.48 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $44.61, down $1.19 or 2.60 percent on the ICE.


Snapping its two-days gaining streak, Indian rupee ended weaker against dollar on Thursday on fresh demand for American currency from banks and importers, in line with the weak trend seen in most Asian currency markets. Besides, losses in local equity market also hit the rupee sentiment. Investors remained cautious as RBI Governor Raghuram Rajan talking on euphoria about India being the world's fastest-growing economy said that India still remains one of the poorest nations in the world on a per capita basis. On the global front, euro remained steady on Thursday, as investors remained cautious ahead of a policy meeting by the European Central Bank where it is widely expected to hold interest rates unchanged at record lows. Finally, the rupee ended at 66.39, 17 paise weaker from its previous close of 66.22 on Wednesday.


The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers  in debt segment. In equity segment, the gross buying was of Rs 6062.61 crore against gross selling of Rs 6073.81 crore, while in the debt segment, the gross purchase was of Rs 1502.13 crore with gross sales of Rs 1394.86 crore.          


The US markets suffered some profit booking and ended lower in last session, with traders reacting to some disappointing earnings numbers and mixed set of economic data, while the jobless claims edged lower, manufacturing activity contracted in Philadelphia area. The Asian markets have made mostly a lower start, though the Chinese market was marginally in green in early trade on surging commodity prices -- spurred partly by expectations of higher Chinese demand. The Indian markets underperformed the global peers in the last session and just managed a flat closing, paring all the early gains. Today, the start is likely to remain cautious on weak regional cues, though some recovery can be seen later in the day and traders will be getting some support with Niti Aayog Chief Executive Officer Amitabh Kant's statement that India needs to grow at ten percent to become ten trillion dollar economy and eliminate poverty by 2032. He also said a growth rate of ten percent would also help in creation of 175 millions jobs by 2032. Also, a private report has said that India's consumption, GDP growth will get a boost from 'La Nina' this year. The aviation stocks will be buzzing today on report that Domestic air traffic logged a robust 24.03 percent growth in January-March 2016 with 11 Indian carriers together flying 230.03 lakh passengers as compared to 185.46 lakh passengers in the same period last year. However, the telecom stocks are likely to remain under pressure, as the Telecom Regulatory Authority of India (TRAI), accusing telecom companies of running a cartel with scant care for customers facing the problem of call drops, has told the Supreme Court that the firms were not upgrading infrastructure to ensure disruption-free calling and justified its decision to impose penalty. There will be lots of earnings announcements too, to keep the markets buzzing.

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  • Indusind Bank has reported a rise of 25.25% in its net profit at Rs 620.35 crore for the quarter ended March 31, 2016 as compared to Rs 495.27 crore for the same quarter in the previous year.
  • Wipro has posted a fall of 8.27% in its net profit at Rs 1964.40 crore for the quarter ended March 31, 2016 as compared to Rs 2141.60 crore for the same quarter in the previous year.
  • Maruti Suzuki India is planning to add around 323 more dealership outlets including 123 Nexa showrooms, which is catering to premium segment of the passenger car market.
  • Bharti Airtel has unveiled its high speed 4G services in Shimoga, taking the number of its 4G towns in the Karnataka to 110.
  • GAIL India will swap a third of its contracted 5.3 million tpy of US imported LNG for a closer gas exporter, in order to cut down on transportation costs.
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