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NSE Intra-day chart (22 November 2016)
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Market Commentary 23 November 2016
Markets to extend gains with a positive start


A session after displaying a depressing performance, Indian benchmark indices pulled through a scintillating performance by vivaciously rallying over half a percent on Tuesday, thanks to the hefty short covering in the recently beaten down frontline counters ahead of monthly expiry of derivative contract on Thursday. The frontline indices took the quantum leap and halted the three successive session southbound journey. Except for some mild profit taking in early afternoon trades, Tuesday's session remained a day of recovery as key indices enthusiastically rallied through the day since investors largely focused on firm cues from global markets after crude prices shot up in overnight trade as the dollar weakened a bit and reports suggested that Russia was keen on cutting output. The weakness of dollar in the international market capped the rupee fall against the dollar. Local sentiments also got buttressed by Moody's latest report, on non-financial corporate, stating that Indian businesses will see strongest profit growth over the next 12 to 18 months on the back of sustained economic expansion and project completions. Meanwhile, the Congress Party on Tuesday held the stubborn approach of the BJP-led NDA regime responsible for repeated disruptions in both Houses and said that the opposition was ready for debate in Parliament. Investors remained cautious over concern of India's demonetisation move estimated to pulling down gross domestic product growth this financial year from last year's 7.6%. The domestic rating agency, ICRA has forecasted a 40 bps dip in growth rate to 7.2% in the second quarter of the current fiscal, citing debilitating impact of the demonetisation drive on the economy. Meanwhile, aviation stocks edged higher with report that domestic airlines carried 86.72 lakh passengers during October this year, registering a growth of 23.18% over the 70.39 lakh passengers flown during the same period in the previous year. Finally, the BSE Sensex gained 195.64 points or 0.76% to 25960.78, while the CNX Nifty rose 73.20 points or 0.92% to 8,002.30.


The US markets closed higher on Tuesday, for a second straight session, with the Dow industrials and the S&P 500 also clearing noteworthy psychological barriers. Markets have been in a strong uptrend since the presidential election two weeks ago. Donald Trump's unexpected victory was viewed as a positive for Wall Street, because the president-elect is expected to advocate for policies - including massive corporate tax cuts and financial and environmental deregulation - seen as supportive for economic growth. On the economy front, sales of previously owned homes surged to the highest in nearly ten years in October, reaffirming the strong demand that's underpinning the housing market despite continuing headwinds. Existing-home sales ran at a seasonally adjusted annual rate of 5.60 million, 2% higher than in September and 5.9% higher than a year ago, the National Association of Realtors reported. Gains were broad-based across the country, with increases in all four regions, and September's rate, originally reported as 5.47 million, was revised up to 5.49 million. The Dow Jones Industrial Average added 67.18 points or 0.35 percent to 19,023.87, Nasdaq was up 17.49 points or 0.33 percent to 5,386.35, while S&P 500 gained 4.76 points or 0.22 percent to 2,202.94.


Crude oil futures pared some gains on Tuesday after hitting their highest levels since October, amid fresh doubts over whether the Organization of the Petroleum Exporting Countries will be able to reach an agreement to limit output. There were reports that Iran, Iraq and Indonesia have doubts about the proposed output cut, aimed at curbing oversupply that has pressured prices lower for more than two years. Benchmark crude oil futures for December delivery declined by $0.21 to close at $ 48.03 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for January delivery was down by $0.82 to $48.50 a barrel on the ICE.


Indian rupee extended its weakness on Tuesday for the third consecutive day amid persistent foreign capital outflows. Traders remained cautious over concern of India's demonetisation move estimated to pull down gross domestic product growth this financial year from last year's 7.6 per cent. The domestic rating agency, ICRA has forecasted a 40 bps dip in growth rate to 7.2 per cent in the second quarter of the current fiscal, citing debilitating impact of the demonetisation drive on the economy. On the global front, dollar dipped but was holding near almost 14-year highs against a basket of currencies on Tuesday as traders took profits following the greenback's longest rally in more than four years. Finally, the rupee ended at 68.25, 9 paise weaker from its previous close of 68.16 on Monday.


The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4356.18 crore against gross sell of Rs 5597.19 crore, while in the debt segment, the gross purchase was of Rs 2374.14 crore with gross sales of Rs 2471.77 crore.


The US markets extended their surge in last session and ended at fresh highs, with traders seem optimistic about the outlook for the economy under Trump, leading traders to move money into stocks and out of assets such as bonds. The Asian markets have made mostly a positive start tracking US gains and led by mining companies, amid bets the Federal Reserve is almost certain to boost interest rates next month with minutes of the Fed's November meeting to be released on Wednesday. The Indian markets finally broke their jinx and added some strength in last session, even though sentiments remained cautious amid renewed capital outflows on growing concerns of demonetization and its aftermath. Today, the start of the penultimate session of the November F&O series expiry is likely to be in green with markets extending the gains on positive global cues. Traders will be getting some support with Finance Minister Arun Jaitley's statement that banks are integrating their information technology system with RBI and GST Network as they prepare to handle tax deposits under the new indirect tax regime. However, there will be some cautiousness too with no work in parliament and Lok Sabha getting adjourned again after opposition uproar over demonetization. Meanwhile Fitch Ratings has said that the demonetisation of old Rs. 500, 1,000 notes will raise revenue for the government but warned that the positive effects of the move are unlikely to be strong and long-lasting to support credit profiles. The banking stocks will remain in focus as the Fitch re-affirmed its “negative” outlook for India's banking sector, saying the financial standing remained “fragile” without bigger capital injections and that the government`s action on banknotes could end up having a mixed impact.


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  • L&T has reported 84.31% rise in its consolidated net profit at Rs 1434.63 crore for the quarter ended September 30, 2016 as compared to Rs 778.37 crore for the same quarter in the last year.
  • Coal India is examining opportunities to export coal with high ash content or high grade fossil fuel to the neighbouring nations.
  • Tata Motors has organized three-day Global Service Camp from November 21 - 23, 2016 for its commercial vehicle range, and will cover 800 touch points in 47 countries.
  • Axis Bank has reduced rates on fixed deposits of tenures between one and three years by 25 to 50 basis points.
  • Bharti Airtel has completed the 4G spectrum trading deal with Aircel in all 8 telecom circles. 




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