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NSE Intra-day chart (21 June 2016)
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Market Commentary 22 June 2016
Markets to make a cautious start on mixed regional cues


It turned out to be a lackadaisical performance from the Indian benchmark indices on Tuesday as they failed to snap the session in the positive territory, settling marginally below the neutral line. The key indices oscillated in an extremely tight range through the session as market participants remained on the sidelines lacking conviction amid the persistent worries ahead of Thursday's British vote, as well as Federal Reserve chief Janet Yellen's two-day testimony before Congress starting later on Tuesday.  Besides, factors like depreciation in rupee values against the dollar and FIIs outflow in the previous session also weighed on the sentiment. Indian rupee weakened by twenty paise to trade at 67.51 against the US dollar at the time of equity markets closing due to fresh buying of the American currency by banks and importers. However, investors got some comfort with latest reform in Foreign Direct Investment (FDI) regime for a host of important sectors including defence, civil aviation and pharmaceuticals along with advancement of monsoon rains. Monsoon rains have covered nearly half of the country, accelerating planting of summer crops like paddy rice, soybeans, cotton and pulses. The June to September monsoon is crucial for farm output and economic growth in India, where just over half of arable land is fed by rain. On the global front, Asian markets ended mostly higher, while the European shares steadied on Tuesday. Earlier, the local benchmark got off to a soft start as the indices showed signs of consolidation in early trade, a session after the awe-inspiring close to a percent rally. The indices moved only sideways thereafter but touched intraday lows in the noon session due to lack of encouraging leads. However, some short covering in the dying hours of trade ensured that the bourses snap the session with moderate cuts. Finally, the BSE Sensex ended lower by 54.14 points or 0.20% to 26812.78, while the CNX Nifty dropped 18.60 points or 0.23% to 8,219.90. 


The US markets closed higher on Tuesday, trading within a narrow range after new polls showed support for the Britons vote to remain in the EU growing. Investors continued to closely follow the most recent polls from the UK, the latest of which showed a split vote, with a slight but statistically insignificant advantage for the ‘remain' vote, which got 45% of voters, while the ‘leave' vote got 44%. In her testimony to the Senate Banking Committee, Federal Reserve Chairwoman Janet Yellen stated that a victory for the leave camp in this week's UK referendum on membership in the EU would pose a significant risk to the US economy and global financial market stability, and reiterated the cautious approach to raising interest rates that the Federal Open Market Committee signaled last week when it stood pat on US interest rates. Meanwhile, even the Federal Reserve is weighing in on valuations in the US stock market. In its monetary policy report submitted to the Congress ahead of Federal Reserve Chairwoman Janet Yellen's testimony, the central bank acknowledges that stock values have grown somewhat richer since the beginning of 2016. The Dow Jones Industrial Average was up by 24.86 points or 0.14 percent to 17,829.73, Nasdaq added 6.55 points or 0.14 percent to 4,843.76, while S&P 500 gained 5.65 points or 0.27 percent to 2,088.90.


Crude oil futures snapped its three days gaining streak on Tuesday, as Brexit concerns remained in focus a possible British exit from the European Union would impact global demand for energy products and energy traders awaited the American Petroleum Institute's weekly inventory report. The strength in dollar too weighed on the sentiments, dollar bounced from one-week lows. Benchmark crude oil futures for August delivery declined by $0.19 or 0.38percent to $49.55 a barrel after trading in a range of $48.87 and $49.95 a barrel on the New York Mercantile Exchange. In London, Brent crude for August delivery closed at $50.55, down $0.10 or 0.20 percent on the ICE.


Indian rupee weaker against dollar on Tuesday due to sustained demand for the American currency from importers amid foreign fund outflows. This is the second session of weakness after Reserve Bank of India (RBI) Governor Raghuram Rajan on Saturday said that he did not want a new term as a governor. Besides, weak domestic markets weighed on the rupee. However, dollar weakness against major currency market overseas limited the rupee fall. The domestic currency is dealing with other uncertainties such as the upcoming vote on Britain's exit from the euro zone. On the global front, dollar made up some lost ground against yen on Tuesday, ahead of the UK referendum on European Union membership later in the week. Finally, the rupee ended 67.49, 18 paise weaker from its previous close at 67.31 on Monday.


The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity, the gross buying was of Rs 3081.26 crore against gross selling of Rs 3608.85 crore, while in the debt segment, the gross purchase was of Rs 754.00 crore with gross sales of Rs 3063.85 crore.             


The US markets continued their upmove and ended with modest gains in the last session after Federal Reserve Chair Janet Yellen in her testimony before the Senate Banking Committee said that a cautious approach on interest rates remains appropriate amid considerable uncertainty about the economic outlook. The Asian markets have however made mostly a lower start ahead of the UK's vote on membership of the European Union tomorrow; the Japanese market was leading the losers pack after the yen strengthened against other major currencies. The Indian markets turned cautious in last session and ended with modest cuts after a choppy trade; though onset of monsoon in major parts and forecasts of heavy rainfall in remaining parts of the country in the next few days helped limit the losses. Today, the start is likely to be a bit cautious on mixed global cues and concern of the Britain's exit from the European Union. Meanwhile, industry body Assocham has said that government must put in place a contingency plan to fight off the volatility arising out of the referendum on 'Brexit' slated for Thursday as it is bound to unnerve the global financial markets. Traders may get some support with an UNCTAD report stating that India's foreign direct investment is likely to cross $ 60 billion this year on favourable policy environment even as the FDI flows globally are set to witness a decline. It has said that the large increase of announced greenfield investments in manufacturing industries may provide further impetus to FDI this year. Also, the Commerce Ministry has asked traders body CAIT to prepare a list of issues, including taxation and banking, which are hindering ease of doing business in the country. There will be some buzz in the coal and mining stocks, as the coal secretary Anil Swarup has said that right now markets do not justify auction of coal blocks. He added that last round of auction has not seen many takers and there are least chances of auction of coal blocks in the near future.


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Tata Motors











  • Tata Power Company's 100% subsidiary Tata Power Renewable Energy has won solar grid connected photovoltaic project of 30 MW in Maharashtra.
  • Tata Motors' subsidiary Jaguar Land Rover has launched 2 litre petrol derivative of Land Rover Discovery Sport at a starting price of Rs 56.50 lakh, ex-showroom, Delhi.
  • Mahindra and Mahindra's subsidiary Mahindra First Choice Services is planning to take the number of its service outlets to 400 this financial year, with an investment of about Rs 350 crore.
  • IndusInd Bank is in advance talks to acquire non-performing assets worth Rs 1,000 crore of the ailing micro lender Spandana Sphoorty Financial.
  • TCS has decided to sign a Memorandum of Understanding with Central University of Rajasthan to offer a two-year programme in Big Data Analysis, for the first time in India.
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