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NSE Intra-day chart (23 November 2016)
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Market Commentary 24 November 2016
Markets to make a soft-to-cautious start on mixed global cues


Indian benchmarks carried forward their northbound journey for yet another session on Wednesday, due to short-covering by investors ahead of November derivatives expiry and a firm global trend. Sentiments remained optimistic with the private report indicating that a moderation in aggregate food prices will lower inflation momentum in November and the CPI inflation is expected to moderate to around 4 percent in November from 4.2 percent in October. Adding optimism among Market participants, Piyush Goyal, minister for power, coal, renewable energy and mines said demonetisation will increase India's tax base and prepare the ground for less taxation, lower inflation and a fall in interest rates. Some support also came with Agriculture Minister Radha Mohan Singh's assurance that sowing of rabi crops like wheat, pulses and oilseeds has not been affected due to banning of old Rs 500 and Rs 1,000 notes. Highlighting various steps taken to ease cash flow to farmers, the minister said farmers are allowed to buy seeds with old Rs 500 notes at government outlets as well as from agri varsities. He also said sowing area of wheat, pulses and oilseeds has been higher till November 18 of this rabi season compared with the year-ago period. However, several investors adopted cautious approach, while entering into market on rising pessimism over the report that government has assessed the impact of demonetisation that is likely to bring the gross domestic product (GDP) growth to 5.5% in the third quarter of financial year 2016-17, a steep drop from 7.1 per cent in the first quarter. Also, rupee was trading at fresh nine month low.  Meanwhile, the GST council meeting on Friday has been cancelled. This is the second time in the month of November that the GST council meeting had to be cancelled. The meeting was initially scheduled for 9-10 November, and was later postponed to 24-25 November. Furthermore, Lok Sabha was on Wednesday disrupted for the fourth consecutive day with Opposition leaders demanding discussion on demonetisation with the presence of Modi. Finally, the BSE Sensex gained 67.34 points or 0.26% to 26028.12, while the CNX Nifty rose 31 points or 0.39% to 8,033.30.


The US markets closed mostly higher on Wednesday, a third straight record close on Wednesday, boosted in part by industrials, while the Nasdaq lagged behind in trading ahead of the Thanksgiving Day holiday. Stocks barely budged after the Federal Reserve released minutes from its November meeting. The Fed minutes showed that policy makers agreed an interest-rate increase may be appropriate relatively soon. Senior Federal Reserve officials agreed last month it might be appropriate to raise interest rates relatively soon against a backdrop of an improving labor market and somewhat higher inflation. On the economy front, the number of Americans who applied for unemployment benefits in mid-November in the week running from November 13 to November 19 leapt 18,000 to 251,000, but the increase comes just one week after initial claims fell to 43-year low in a reflection of a sharply improved labor market. The Dow Jones Industrial Average added 59.31 points or 0.31 percent to 19,083.18, S&P 500 gained 1.78 points or 0.08 percent to 2,204.72, while Nasdaq was down 5.67 points or 0.11 percent to 5,380.68.


Crude oil futures extended their decline with modest fall on Wednesday, with traders shrugging off a report showing a drop in crude oil inventories amid continued uncertainty about next week's OPEC meeting. Doubts remain over the outlook for a deal, amid uncertainty over how any agreement would be implemented. The report from the Energy Information Administration said crude oil inventories fell by 1.3 million barrels last week. The report also showed that gasoline inventories rose by 2.31 million barrels, while distillate stockpiles rose by 0.32 million barrels, compared to forecasts for a decrease of 0.35 million. Benchmark crude oil futures for January delivery declined by $0.07 or 0.2 percent to close at $ 47.96 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for January delivery declined by $0.17 or 0.35 percent to $48.95 a barrel on the ICE.


Extending losses for the fourth straight session, Indian rupee ended at 9-month low as against the US dollar on Wednesday. Sentiments remained dampened with the report that government has assessed the impact of demonetisation that is likely to bring the gross domestic product (GDP) growth to 5.5% in the third quarter of financial year 2016-17, a steep drop from 7.1 per cent in the first quarter. Gains in the local equity market even failed to arrest the rupee's fall. The dollar strengthened against basket of overseas currencies on hopes that the US President-elect Donald Trump's proposed fiscal expansion may boost inflation, prompting the Fed to raise rates more aggressively than previously expected. Finally, the rupee ended at 68.56, 31 paise weaker from its previous close of 68.25 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4447.76 crore against gross sell of Rs 5122.36 crore, while in the debt segment, the gross purchase was of Rs 1180.79 crore with gross sales of Rs 1825.69 crore.


The US markets made a mixed closing in last session, while the Dow and the S&P 500 reached new record closing highs, the tech-heavy Nasdaq ended the day in the red, as traders seemed taking a breather following the upward move seen over the past couple weeks. The Asian markets too have made a mixed start with some indices in the region suffering cuts of over half a percent. Though, the Japanese market after a day of break was moving higher as the dollar rose to near a more than seven-month high against the yen. The Indian markets despite some choppiness managed another positive close in last session; short covering supported the markets to keep the momentum going. Today, the start of the F&O series expiry day is likely to be a bit cautious and the trade will turn volatile with the progress of the day. Traders will be concerned with the minutes of the US Fed's November meeting showing that the US central bank is poised to raise rates in December. On the domestic front too, the Goods and Services Tax (GST) Council meeting, scheduled for Friday has been cancelled and the Council will now meet on December 2-3 to deliberate on pending issues. The government is looking to introduce three draft Bills - central GST (CGST), integrated GST (IGST) and compensation law - in the ongoing winter session of the Parliament that ends on December 16. Meanwhile, Commerce and Industry Minister Nirmala Sitharaman has said that economic output in the current quarter may get affected, with the government's demonetisation drive temporarily hitting commercial activities in some sectors. Traders however can get some support with Niti Aayog CEO Amitabh Kant's statement, backing the government's decision to demonetise higher-value currency notes that the country is moving towards a totally digitised payment system that will accrue 'huge gains' in the long-term for the economy.


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  • Bharat Heavy Electricals has commissioned a 93 MW steam turbine-based Captive Power Plant at Hazira in Gujarat.
  • Lupin has received tentative approval for its Abacavir Sulfate and Lamivudine Tablets, 600 mg/300 mg from the United States Food and Drug Administration
  • Bharat Petroleum Corporation is reportedly all set to export a light diesel oil cargo from Kochi in a rare move.
  • Sun Pharmaceutical Industries' wholly owned subsidiary (Sun Pharma) has executed definitive agreements for acquisition of 85.1% of JSC Biosintez.
  • Bharti Airtel has partnered with Telangana State Road Transport Corporation to offer free Wi-Fi services on luxury buses in Hyderabad.
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