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NSE Intra-day chart (24 January 2017)
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Market Commentary 25 January 2017
F&O expiry session to see a positive start on sanguine global cues


Indian equity indices sustained their uptrend for the second day of F&O expiry week, as sentiment stayed positive on optimism ahead on Union Budget 2017 to be unveiled next week. The Supreme Court paved the way for presentation of the Union Budget on February 1, as it dismissed a plea seeking its postponement in view of Assembly elections in five states. Investors are hoping for a budget that delivers some incentives to support an economy, which has been hit by India's shock move to ban higher-value banknotes. Further, the government is likely to set fiscal deficit target in the range of 3.3-3.4 percent of GDP for the financial year 2017-18 in the upcoming Budget. A high-level committee the government had set up to review fiscal responsibility rules has recommended a framework to allow greater fiscal space for the government to spend more on development. Besides, positive trade in Asian markets coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Indian rupee strengthened by 7 paise to 68.14 against the dollar on Tuesday on increased selling of the US currency by exporters and banks. Some support also came from SBI's research report Ecowrap, which has said that the Government is likely to make sweeping recast of direct taxes in the ensuing Budget to give a boost to the economy following demonetization.  On the global front, Asian markets ended mostly higher on Tuesday as higher commodity prices on a weaker dollar helped investors shrug off renewed concerns about protectionist policies under new US President Donald Trump. Back home, finally, the BSE Sensex gained 258.24 points or 0.95% to 27375.58, while the CNX Nifty was up by 84.30 points or 1% to 8,475.80. 


The US markets closed higher on Tuesday, with the S&P 500 and the Nasdaq Composite at new records, while the Dow Jones Industrial Average resumed its march toward the psychologically-important 20,000, finishing less than 90 points away from the elusive milestone. Investors have been watching to see what Trump can accomplish in his first 100 days in office. The Congressional Budget Office estimated that the federal government would run a budget deficit of $559 billion in fiscal 2017, slightly smaller than an earlier projection. In its latest budget and economic outlook, the CBO said the new estimate was due to its expectation that mandatory spending would be lower than earlier anticipated. In August, the nonpartisan CBO estimated the deficit for fiscal 2017 would be $594 billion. On the economy front, sales of previously-owned homes dipped in December, as increasingly tight inventory and higher prices began to stifle the housing market. Existing-home sales ran at a seasonally-adjusted annual pace of 5.49 million, the National Association of Realtors said. That was down 2.8% from an upwardly-revised November, which marked a nine-year high, but only 0.7% higher than a year ago. The Dow Jones Industrial Average added 112.86 points or 0.57 percent to 19,912.71, the Nasdaq gained 48.02 points or 0.86 percent to 5,600.96, while S&P 500 was up by 14.87 points or 0.66 percent to 2,280.07.


Crude oil futures ended higher on Tuesday albeit modestly ahead of the inventory data. The prices held gains on widespread agreement that a coordinated pact between OPEC and non-OPEC nations to trim 1.8 million barrels-per-day (bpd) from global output is working as well as dips in the dollar index to seven-week lows that benefit buyers in currencies other than greenbacks.  Benchmark crude oil futures for March delivery moved up by $0.43 or 0.82 percent to $53.18 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended up by 0.38 percent at $55.44 on the ICE.


Indian rupee appreciated on Tuesday due to sustained selling of the US currency by exporters and banks. The domestic currency was in the positive terrain from the very beginning supported by the weak dollar index against other major currencies. Sentiments remained positive with SBI's research report Ecowrap, which said that the Government is likely to make sweeping recast of direct taxes in the ensuing Budget to give a boost to the economy following demonetisation. On the global front, dollar steadied on Tuesday, recovering from a dip on fears that US President Donald Trump's focus on protectionism over fiscal stimulus suggested his administration might be content to gain a competitive advantage through a weaker currency.  Finally, the rupee ended at 68.14, 7 paise stronger from its previous close of 68.21 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 4313.87 crore against gross selling of Rs 4575.95 crore, while in the debt segment, the gross purchase was of Rs 436.20 crore with gross sales of Rs 498.59 crore.


The US markets coming out of their consolidation mood rallied in last session, with the S&P 500 and Nasdaq Composite posting record closing highs despite mixed U.S. economic data. Existing home sales fell 2.8 percent in December to reach an annual pace of 5.49 million units. The Asian markets have made an all green start taking cues from the US markets, as corporate results reignited investors' optimism in economic growth, while a surge in commodities prices bolstered raw-materials companies.  The Indian markets gradually gaining pace posted decent gains in last session on supportive global cues. Today, the start of the F&O series expiry session is likely to be in green tailing strong cues from other global markets. However, there will be some volatility too ahead of the expiry as the traders will roll out their positions to the new series. Marketmen will be eyeing the Chief Ministers' panel on digital economy submitting its interim report to the government. Meanwhile, the Central Board of Direct Taxes (CBDT) tightening screws on shell companies has issued the much-awaited “guiding principles” for determination of a Place of Effective Management (PoEM) of a company, scotching speculation that the Budget may see its removal from the statute book. There will be some cautiousness too in the markets with India Ratings, a unit of Fitch, in its latest report stating that most Indian companies with overseas debt have not hedged enough of their foreign currency risk, making them vulnerable to any sharp movements in the rupee. There will be lots of individual stock reaction based on their earnings announcements.


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  • Hindustan Unilever has reported 6.82% rise in its net profit at Rs 1037.93 crore for the quarter ended December 31, 2016 as compared to Rs 971.66 crore for the same quarter in the previous year.
  • Tata Motors has launched its SUV 'HEXA', a power packed, feature loaded and adrenaline pumped vehicle, in Rajasthan on January 23, 2017.
  • Lupin has launched its Norgestimate and Ethinyl Estradiol Tablets USP, 0.25 mg/0.035 mg having received approval from the United States Food and Drug Administration.
  • Bharat Heavy Electricals in partnership with ABB, has secured a landmark order from Power Grid Corporation of India.
  • HDFC Bank has reported 15.15% rise in its net profit at Rs 3865.33 crore for the quarter ended December 31, 2016 as compared to Rs 3356.84 crore for the same quarter in the previous year.
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