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NSE Intra-day chart (24 November 2016)
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Market Commentary 25 November 2016
Markets to see some recovery with the start of new series


The November series futures and options contract expiry day turned out to be a shocker for the Indian markets as benchmarks, after showing some recovery in early afternoon session, crashed like house of card in the last leg of trade, with investors offloading their positions an hour before the F&O contract expiry. Sentiments remained dismal from start of the session as the upbeat US economic data released on Wednesday strengthened the prospects for higher US interest rates. The minutes from the US Federal Reserve's November policy meet, showed Fed policymakers appeared confident on the eve of the US Presidential election to hike interest rates soon. On the domestic front, sentiments got hit after the rupee crashed to nearly 39-month low of 68.84, plummeting by another 28 paise against the US dollar on Thursday amid sustained foreign fund outflows and the greenback's surge in overseas markets. Foreign Institutional Investors (FIIs) have withdrawn over Rs 3,700 crore from equity markets this week. Also, the much-awaited Goods and Services Tax (GST) Council meeting, slated for Friday, was postponed by a week that too adversely impacted the sentiments. Adding anxiety among market participants, Commerce and Industry Minister Nirmala Sitharaman said that economic output in the current quarter may get affected, with the government's demonetization drive temporarily hitting commercial activities in some sectors.  Goldman Sachs has forecasted a deceleration in India's GDP growth to 6.8% this fiscal, down from 7.6% last financial year, due to demonetisation of Rs 500 and Rs 1000 currency notes. Meanwhile, Consumer products companies such as Britannia, Parle Products, Dabur and Emami have started cutting their production as sales have slowed down significantly in the aftermath of the demonetisation drive. Dabur CEO Sunil Duggal said sales were down 20% over last week, which has resulted in the supply chain automatically calibrating production. Emami Director Harsha V Agarwal, too, said the company has started making adjustments to align production with demand. Finally, the BSE Sensex declined by 191.64 points or 0.74% to 25860.17, while the CNX Nifty dropped 67.80 points or 0.84% to 7,965.50. 


The US markets remained closed on Thursday on account of 'Thanksgiving Day' holiday.


Crude oil futures moved a bit higher in holiday thinned trade. Though, the uncertainty over a planned OPEC-led output cut and thin liquidity due to the U.S. Thanksgiving holiday weighed on the sentiments. The surge in dollar too capped the gains, a strong dollar, in which oil is traded, makes fuel purchases more expensive for holders of other currencies, potentially curbing demand. Benchmark crude oil futures for January delivery was up by $0.12 or 0.35 percent at $48.06 a barrel in electronic trading on the New York Mercantile Exchange. In London, Brent oil futures for January delivery was higher by $0.10 or 0.20 percent to $49.05 a barrel on the ICE.


Indian rupee depreciated for the fifth consecutive session against the US dollar on Thursday amid sustained foreign fund outflows. The sentiments remained down-beat after Commerce and Industry Minister Nirmala Sitharaman's has said that economic output in the current quarter may get affected, with the government's demonetization drive temporarily hitting commercial activities in some sectors. Sentiments were under pressure as the US Fed gave more signals that it was inclined towards a rate hike in December. Besides, losses in the domestic equity markets coupled with surging US bond yields too dampened on the rupee sentiments. Finally, the rupee ended at 68.74, 18 paise weaker from its previous close of 68.56 on Wednesday.


The FIIs as per Thursday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4235.62 crore against gross sell of Rs 5330.72 crore, while in the debt segment, the gross purchase was of Rs 358.04 crore with gross sales of Rs 3302.37 crore.


The US markets remained closed in last session unable to give any cues to other global markets. The Asian markets though have made mostly a positive start, with Japanese market extending its rally with the dollar heading toward its steepest three-week climb against the yen since 1995. The Indian markets changed the course in the final hours of last session and ended with cut of another over half a percent, and the November series saw steep decline of over seven percent for the benchmark indices. Today, the start of the new series is likely to be in green and some good bounce back can be seen in early deals on positive regional cues. Traders will also be getting some support with Finance Minister Arun Jaitley's statement that the government's demonetisation move is going to have 'a positive impact on the economy, including GDP'. Jaitley said there will be a positive impact 'because a lot of money that operates in the shadowy economy will now become part of the banking structure' and banks will have a lot more money to support the economy. Meanwhile, the global rating agency Moody's has said that India's decision to scrap some high-value notes will significantly disrupt economic activity, result in weaker consumption and economic growth in the immediate term but is expected to boost tax revenues and trigger faster fiscal consolidation in the long run. There will be some buzz in the export oriented stocks, with Commerce and Industry Minister Nirmala Sitharaman stating that the finance and railways ministries are working on ways to cut logistics costs which make exports uncompetitive. The Minister said that she has discussed the increasing logistics costs with the Finance Minister. There will be some important result announcements too, to keep the markets buzzing.


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Bank of Baroda





  • Infosys has signed a definitive agreement to a Limited Partner investment of Rs.31.6 crore from its Innovation Fund in Stellaris Venture Partners.
  • Tata Steel is reportedly set to commission its 55,000 tonne per annum ferrochrome plant at Gopalpur in south Odisha on November 30, 2016.
  • ICICI Bank's merchant acquiring arm ICICI Merchant Services has waived the Merchant Discount Rate on debit card transactions at all merchants serviced by IMSL.
  • UltraTech Cement has proposed to issue unsecured redeemable non-convertible debentures amounting to Rs 400 crore on private placement basis.
  • YES Bank has partnered with Gujarat State Road Transport Corporation to digitize payments of Bus Tickets for its customers.
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