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NSE Intra-day chart (25 April 2016)
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Market Commentary 26 April 2016
Markets to extend the sluggishness with a soft start


Indian equity indices commenced the F&O expiry week on a disturbing note as they went on to extend the declining streak for the second successive session, market participants remained on the sidelines lacking conviction amid slips in crude oil prices and depreciating rupee. Indian rupee was trading lower by 21 paise at 66.71 against the dollar at the time of equity markets closing on sustained demand for the US currency from importers.  Besides, traders remained cautious ahead of the April derivative contracts on Thursday and policy decisions from the Bank of Japan and US FOMC this week. However, investors got some confidence with PHD Chamber of Commerce's report that India's economy is likely to clock nearly 8 per cent growth in the current fiscal on the back of robust private consumption, which has benefited from lower energy prices and higher real incomes. Some support also came with the report that foreign Direct Investment into India touched the highest ever mark of $51 billion during the April-February period of last fiscal ended March 31, 2016. Meanwhile, stocks of Public sector banks (PSBs) came under pressure after the report that the PSBs will not be able to raise funds from the markets and government will have to provide capital support to them in the near term given their weak solvency position. On the global front, most of the Asian markets ended lower on Monday, while the European markets too mirrored similar trends in early deals. Back home, the local benchmark got off to a weak start as investors turn jittery and booked profits ahead of the beginning of the second part of Parliament's Budget session, as concerns over passage of proposed Bills persisted and focus shifted to key Goods and Services Tax Bill, which is considered as the country's biggest indirect tax reform since Independence. The frontline indices kept losing steam thereafter and even drifted to the lowest point in the session in late afternoon trades. Though, the bourses recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. Finally, the BSE Sensex declined by 159.21 points or 0.62% to 25678.93, while the CNX Nifty dropped 44.25 points or 0.56% to 7,855.05. 


The US market closed lower on Monday, as investors weighed a round of lackluster earnings and awaited the conclusion of a Federal Reserve policy meeting later in the week. Central bank policy is expected to remain a prominent theme this week. Signs of rising inflation in the US might influence the Fed to adopt slightly more hawkish language in its monetary policy statement. On the economy front, new home sales dipped 1.5% to a seasonally adjusted annual rate of 511,000 in March. Along with a big upward revision to February data, the March data was more evidence of slow and steady progress in the housing market. The March data missed forecasts of a 518,000 pace, but February's data was revised up by about the same amount, to a 519,000 rate. March's pace was 5.4% higher compared to a year ago, and it marked the fourth consecutive month of sales above a 500,000 pace, the first time that's happened since early 2008. The Dow Jones Industrial Average lost 26.51 points or 0.15 percent to 17,977.24, Nasdaq was down by 10.44 points or 0.21 percent to 4,895.79, while S&P 500 dropped 3.79 points or 0.18 percent to 2,087.79.


Crude oil futures after a choppy trade ended lower on Monday, with signals from Saudi Arabia that an excessive supply glut is about to level off anytime in the near-term future. Saudi officials at the Shaybah Oil field in the Al-Khali desert announced that it will ramp up production by 250,000 barrels per day to 1 million in May.  Though prices also got some support in early trade on weaker dollar. Dollar-denominated commodities such as crude become cheap for foreign purchasers when the dollar depreciates.  Benchmark crude oil futures for June delivery declined by $1.07 or 2.45 percent to $42.66 a barrel after trading in a range of $42.59 and $44.03 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $44.36, down $0.70 or 1.55 percent on the ICE.


Indian rupee ended weaker against dollar on Monday on sustained demand for the American currency from banks and importers. Besides, weak trade in the domestic equity market and losses in Asian currency market also hit the rupee sentiment. Meanwhile, investors awaited policy decisions from the Federal Reserve and the Bank of Japan later in the week. This was the third session for which the rupee traded lower. On the global front, dollar rose against the yen, but later reversed gains ahead of meeting of the US and Japanese central banks later this week. Finally, the rupee ended at 66.62, 14 paise weaker from its previous close of 66.48, on Friday.


The FIIs as per Monday'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 3706.70 crore against gross selling of Rs 3511.75 crore, while in the debt segment, the gross purchase was of Rs 499.50 crore with gross sales of Rs 1670.14 crore.          


The US markets though recovered from the lows of the day but could not manage a positive close and ended with modest cuts in last session, as traders cashed in on recent gains ahead of the Federal Reserve's monetary policy announcement on Wednesday. The Asian markets have made mostly a lower start ahead of central bank meetings in Tokyo and Washington this week, even though crude oil resumed gains and commodities too advanced. The Indian markets after losing their early momentum traded in a range and ended lower by over half a percent in last session. Today, the start is likely to remain sluggish on weak global cues and traders will largely be concentrating on earnings and development in the parliament for further cues. However, markets may get some support with report of Department of Industrial Policy and Promotion (DIPP) that Foreign Direct Investment  (FDI) into India touched the highest ever mark of $51 billion during the April-February period of last fiscal ended March 31. Meanwhile, Economic Affairs Secretary Shaktikanta Das, pledging a strong focus on the execution of Budget announcements and ensuring that there are no delays in investments by key ministries, said that India plans to further liberalise rules for overseas investors as the government looks to reduce the need for approvals. The realty stocks will be buzzing today with the RBI governor Raghuram Rajan putting the onus on real estate developers, asking them to reduce prices to encourage more people to buy properties. The jewellary and gold stocks too may see some action, as the government has further extended the deadline for jewellers to get their businesses registered with central excise department. There will be lots of important earnings too, to keep the markets buzzing.  


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  • Tata Motors is eyeing to raise Rs 300 crore through issuance of Non-Convertible Debentures to meet its expansion plan.
  • State-owned ONGC is planning to explore as many as 17 shale gas and oil wells in both east and west coasts and in this regard, the company will invest around Rs 700 crore.
  • Reliance Industries has purchased crude oil from Iran after a 6-year break.
  • Tata Power Solar, a wholly owned subsidiary of Tata Power, has successfully commissioned a 20 kW solar rooftop project for Raj Auto, a Hero MotoCorp showroom, in Aurangabad.
  • Hero MotoCorp is setting up a new manufacturing facility in Andhra Pradesh, in which it plans to invest Rs 3,000 crore.
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