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NSE Intra-day chart (22 April 2016)
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Market Commentary 25 April 2016
Markets to get a somber start of the F&O expiry week


It turned out to be a lackadaisical performance from the benchmark indices on Friday as they failed to extend the gaining streak and settled marginally below the neutral line. However, Indian markets rose nearly 1 percent this week and were on the verge of turning positive for the year on hopes the central bank would continue to cut interest rates in view of easing inflation and expectations of good monsoon rains. Rises in Indian markets was also supported by foreign investors, who  bought a net $872.22 million worth of Indian shares so far this month, taking this year's inflows to $1.41 billion. However, weak trend in global markets coupled with depreciation in rupee value weighed on sentiment in the last day of the trading week. Further, investors remained cautious as they looked forward to earnings show of blue-chip companies, including Reliance Industries, which is set to release its numbers after trading hours. Meanwhile, banking stocks rose for another session after a report that the central bank had trimmed the list of companies that needed bad loan provisioning. One the other hand, tyre stocks declined on a report that the Natural rubber prices have risen by over 15% in April 2016 so far. On the global front, Asian markets ended mostly in red, while European stocks remained lower in early trade. Back home, after getting weak start, Indian benchmark indices slipped into deeper red in the early moments of trade since investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets.  The key indices failed to show any kind of eagerness and oscillated around the neutral line for most part of noon trades and drifted deeper into the red terrain in afternoon session on account of weak European opening, post which the indices found it hard to claw back into the green terrain and eventually settled in the negative zone. Finally, the BSE Sensex declined by 42.24 points or 0.16% to 25838.14, while the CNX Nifty dropped 12.75 points or 0.16% to 7,899.30.


The US markets recovering from their early lows managed a flat closing on Friday, with Dow industrials eking out small gains to close above 18,000, while the tech heavy Nasdaq making a weak closing due to big losses in tech stocks, such as Alphabet Inc. and Microsoft Corp. Investors grappled with a number of mixed results from blue-chip companies. Negative sentiment were also generated by a report from Markit showing that its reading on US manufacturing activity unexpectedly fell to a six-year low in April. The flash estimate of Markit manufacturing purchasing managers index came in at 50.8 in April compared to 51.5 in March. However, the selling pressure was partly offset by a notable increase by the price of crude oil. Also, the dollar posted its strongest weekly gain against the yen since November 2014. Investors are turning their attention to the BOJ and a meeting of the Federal Reserve next week to get further cues. The Dow Jones Industrial Average gained 21.23 points or 0.12 percent to 18,003.75, the S&P 500 was tad higher by 0.10 points to 2,091.58, while the Nasdaq declined by 39.66 points or 0.80 percent to 4,906.23.  


Crude oil futures despite paring some gains managed a positive close on Friday and extended the gains for the third straight week, after report that oil rig counts throughout the US fell mildly last week to hit a fresh record-low. Oil services firm Baker Hughes said in its weekly rig count report that U.S. oil rigs last week fell by eight to 343, down a fifth straight week. The domestic oil rig count in the U.S. has now fallen in 15 of the last 16 weeks. The crude prices capped some gains as the dollar firmed up versus a basket of six other major currencies, making the commodity expensive. Benchmark crude oil futures for June delivery gained $0.59 or 1.37 percent to $43.77 a barrel after trading in a range of $43.11 and $44.45 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $45.13, up $0.60 or 1.35 percent on the ICE.


Indian rupee extended its weakness for the second straight day against dollar on Friday due to increased demand for American currency from banks and importers, tracking losses in the Asian currencies market. Besides, firm dollar against some global currencies overseas and a weak domestic equity market too weighed on the rupee sentiment. Investors failed to get any relief with Niti Aayog Chief Executive Officer Amitabh Kant's statement that India needs to grow at ten percent to become ten trillion dollar economy and eliminate poverty by 2032. On the global front, yen was weak against the dollar on Friday after a report said that the Bank of Japan is considering expanding its negative rate policy to bank loans and could cut rates further. Finally, the rupee ended at 66.48, 9 paise weaker from its previous close of 66.39, on Thursday.


The FIIs as per Friday'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 5738.56 crore against gross selling of Rs 4795.16 crore, while in the debt segment, the gross purchase was of Rs 679.55 crore with gross sales of Rs 1003.20 crore.          


The US markets made a mixed closing in last session, while there were some earnings disappointments from tech companies that weighed on the Nasdaq, some positive economic data kept the other major averages in green. The Asian markets have made a weak start, with some of the indices trading lower by about a percent in early deals. Traders are focusing on Central bank policy meetings in Japan and the US later in the week for further cues. The Japanese market declined as the yen strengthened against other major currencies. The Indian markets displayed a choppy trade in last session and closed marginally in red. Today, the start is likely to remain somber and markets will be following the soft global cues, though the trade is likely to remain choppy owing to the F&O series expiry later in the week. Traders will be first reacting to the two big earnings numbers of Reliance Industries and Cairn India, while the former posted a record profit numbers in the fourth quarter, beating estimates; the latter posted its biggest quarterly loss in Q4. Markets may get some support with the PHD Chamber of Commerce' statement that the Indian economy is likely to grow at nearly 8 percent in the current fiscal, driven by robust private consumption, which has benefited from lower energy prices and higher real incomes. The banking stocks too may see some action, as the Chief Economic Advisor Arvind Subramanian has said that Public sector bankers are wary of writing down bad loans for fear of 'referee institutions' like CBI and CVC going after them. There will be some buzz in the gold and jewellary stocks, with the government deciding to set up a high-level sub-committee to look into the issue of excise duty on jewellery. The sub-committee, chaired by former Chief Economic Advisor Ashok Lahiri, will interact with the trade and industry on the issue. There will be some important earnings announcements too, to keep the markets ticking.


Support and Resistance: NSE Nifty and BSE Sensex



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  • TCS has launched Mobile Network Function Virtualization Management framework for anytime-anywhere NFV monitoring and management for Red Hat OpenStack Platform.
  • HDFC Bank has reported a 20 percent rise in its net profit at Rs 3,374 crore for the fourth quarter ended March 2016.
  • Tata Motors has launched its cool new hatchback, TIAGO in Guwahati with cutting edge design, technology and driving dynamics to create new segment benchmarks in the industry.
  • The UK government is willing to acquire 25% minority equity stake in Tata Steel's UK operations as well as offer hundreds of millions of pounds in debt relief to help potential buyers.
  • M&M's arm Mahindra Intertrade has set-up a new state-of-the-art, fully-automated, high speed lamination line with dual stacking and a Built-up cores facility at its Electrical Steel Service Centre in Vadodara.
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