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NSE Intra-day chart (22 September 2016)
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Market Commentary 23 September 2016
Markets likely to consolidate after the big gains


Indian benchmark indices showcased a scintillating performance on Thursday, by rallying around a percent point amid strong global cues. Sentiments remained up-beat since start as key bourses opened with a huge gap on the up-side and traded in tight band throughout the session as the Federal Reserve opted to hold its key short-term interest rate steady. Investors across the Asian region welcomed the news as a rate hike would have pulled money out of emerging markets. On the domestic front, sentiments got boost with the report that country's current account deficit (CAD) narrowed to $ 0.3 billion, or 0.1 percent of GDP, in the first quarter of 2016-17, significantly lower than $ 6.1 billion or 1.2 percent of GDP in Q1 of 2015-16 on account of lower trade gap. Some support also came with a private report stating that rural demand is likely to turn up in the coming months largely driven by better rains, and Kharif farm income, which is expected to jump 12.3 percent this year. Another private report indicated that India's foodgrain production is estimated to rise by 9 per cent to an all-time high of 135.03 million tonnes in the kharif season (summer sown) of 2016-17 on record output of rice and pulses. Investors also took note of the report that regulator SEBI is considering allowing some categories of Foreign Portfolio Investors (FPIs) to directly trade in Indian markets, starting with debt segment. The move aims at making it easier for overseas investors to invest in India. Meanwhile, Logistics stocks edged higher on reports that Commerce Ministry is working on a proposal to enhance the logistics competitiveness of exporters and is discussing it with the railways as well as port authorities. Railway stocks remained on buyers' radar for second consecutive day, after the Cabinet approved merging Railway Budget with the general Budget and doing away with distinction of plan and non-plan expenditure. Finally, the BSE Sensex surged by 265.71 points or 0.93% to 28773.13, while the CNX Nifty gained 90.30 points or 1.03% to 8,867.45.


The US markets closed higher on Thursday, with the Nasdaq Composite notching a record close, as investors' enthusiasm following the Federal Reserve's most recent policy update spilled over into a second session. Better-than-expected weekly jobless claims data, which fell to the lowest tally since July, signaled a strong labor market and helped extend the optimistic tone on Wall Street. The number of people who applied for first-time US unemployment-insurance benefits fell by 8,000 to 252,000 in the week that ended September 17, marking 81 weeks that initial claims remained below the key 300,000 level, the longest streak since 1970. Longer-run trends also showed improvement, with the four-week average of new claims falling 2,250 to 258,500. The continuing claims fell by 36,000 to 2.1 million in the week that ended September 10. The four-week average of continuing claims, which reflect the number of people already receiving benefits, fell 8,000 to 2.14 million. The Dow Jones Industrial Average added 98.76 points or 0.54 percent to 18,392.46, Nasdaq gained 44.34 points or 0.84 percent to 5,339.52, while S&P 500 was up 14.06 points or 0.65 percent to 2,177.18. 


Crude oil futures moved further high on Thursday after the dollar weakened and US stockpiles dwindled. Traders also got some support with good economic data, initial jobless claims unexpectedly dropped to a two-month low in the week ended September 17th. But crude futures pared gains as traders worried that OPEC was not nearing an agreement to reduce a global glut. It was reported that a two-day expert-level meeting of the Organization of the Petroleum Exporting Countries on production cooperation had yielded no major breakthrough. Benchmark crude oil futures for October delivery gained $0.98 or 2.2 percent to close at $46.32 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery was up by $0.82 or 1.8 percent to $47.65 a barrel on the ICE.


Indian rupee ended substantially stronger against American currency after the US Federal Reserve decided against lifting interest. Domestic currency got some support with the report that country's current account deficit (CAD) narrowed to $ 0.3 billion, or 0.1 percent of GDP, in the first quarter of 2016-17, significantly lower than $ 6.1 billion or 1.2 percent of GDP in Q1 of 2015-16, on account of lower trade gap. Besides, increased foreign fund inflows in the local equity market coupled with dollar weakness against some other currencies overseas, also aided to the positive milieu of Indian currency. On the global front, dollar hit a near 4-week low against the yen on Thursday after the US Federal Reserve kept monetary policy steady and projected a less aggressive path for interest rates hikes in coming years. Finally, the rupee ended at 66.67, 35 paise stronger from its previous close of 67.02 on Wednesday.


The FIIs as per Thursday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 4538.01 crore against gross selling of Rs 4029.96 crore, while in the debt segment, the gross purchase was of Rs 609.18 crore with gross sales of Rs 1388.89 crore.


The US markets extended their gains in last session and the tech-heavy Nasdaq once again reached a new record closing high. Traders continued to react positively to the Federal Reserve's monetary policy announcement of Wednesday. The Asian markets have made a mixed start with some of the indices trading modestly in red, paring their last session gains as the dollar strengthened and oil retreated from a two-week high. The Indian markets joined the global rally and posted decent gains in last session with the major benchmarks reclaiming their crucial levels, gearing for an all time high. Today, the start is likely to be in green but a bit cautious on mixed regional cues, though traders will be getting some support with the centre and states, moving towards rolling out GST from April 1, agreeing on a timetable for deciding on the tax rate and completion of legislative work, but differences remained on the turnover limit for exemption from the new tax. Meanwhile, Minister of State for Finance Arjun Ram Meghwal, stressing that the new indirect tax regime is a major tool for improving ease of doing business has said the government will be able to implement Goods and Services Tax (GST) from April 1, next year. In other positive news, India's kharif harvest is poised to jump 9% to 135 million tonnes, beating a six-year-old record. There will be some buzz in export oriented stocks, as the government has extended fiscal incentives to more items such as marine products at higher rates under a scheme with a view to boosting exports, which remain in the negative zone. The total support extended by the government under the Merchandise Exports from India Scheme (MEIS) has been enhanced to Rs 23,500 crore per annum from the present Rs 22,000 crore. The telecom space too will see some action with Vodafone Group Plc pumping in a record Rs 47,700 crore of overseas investment into its Indian operation to take on Reliance Industries' Jio.


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  • Tata Motors is reportedly planning a slew of new launches in small and big truck segments in order to regain its market share in the next one year.
  • Tata Power has introduced digital interface by launching a universal Mobile Application for all its stakeholders along with employees and consumers on iOS post the Android release.
  • NTPC has received shareholders' approval to raise up to Rs 15,000 crore through issuance of debentures/bonds on private placement basis.
  • Aurobindo Pharma has received tentative approval for Dolutegravir 50mg from US Food & Drug Administration.
  • HDFC Bank has issued on private placement basis, Senior, Unsecured, Redeemable, Long Term, Non-Convertible Bonds in the nature of Debentures amounting to Rs 6700 crore and face value Rs 10,00,000 each.
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