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NSE Intra-day chart (23 December 2016)
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Market Commentary 26 December 2016
Last week of the year to see a somber start


Snapping seven days losing streak, Indian equity benchmarks ended the session slightly in green on Friday as traders opted to buy beaten down but fundamentally strong stocks after seven days of continues drubbing. Markets made weak start and traded subdued in early deals, tracking sluggish global cues. Sentiments also remained dampened on report that the share of foreign portfolio investments (FPI) through participatory notes (P-notes) slipped to its lowest level in nearly three years to Rs 1.79 lakh crore in end-November. P-Notes investments have fallen to a 33-months low, the total value of P-Notes investment in Indian markets equity, debt and derivatives has plunged to Rs 1,79,648 crore in November-end, from Rs 1,99,987 crore at the end of October. Though, domestic gauges pared all of their initial losses and entered into green terrain, as traders took some encouragement with some signs of thaw appearing on the GST issue, and the prospects of early roll out of goods and services tax (GST) brightening with the states and the Centre making progress on a crucial legislation, amid indications that the states may get concessions to tide over possible demonetisation-related revenue loss. Some support also came after NITI Aayog vice-chairman Aravind Panagariya has termed Prime Minister Narendra Modi's demonetisation scheme as a “frontal attack” on black money and said that more such actions are in store to curb corruption. Traders also got some sense of relief with Union Minister for Statistics and Programme Implementation D. V. Sadananda Gowda's statement that demonetisation could bring down the growth rate by just 0.2 percent and not more than that. He added that India's GDP stood at 7.6 percent and it may go down to 7.4 percent. On the global front, Asian markets ended mostly in red, with investors looking to US economic data scheduled later in the day for potential catalysts. Back home, on the sectoral front, auto stocks remained under pressure on reports that the Centre is looking at introducing a law where one may not be allowed to register new car or any other vehicle unless he produce proof that he has adequate parking space for it. Finally, the BSE Sensex gained 61.10 points or 0.24% to 26040.70, while the CNX Nifty was up by 6.65 points or 0.08% to 7985.75.


The US markets ended the Friday's trade slightly in green ahead of Christmas, as traders opted to buy beaten down socks after two days of continuous drubbing. Sentiments remained up-beat after the Commerce Department released a report showing a much bigger than expected increase in new home sales in the U.S. in the month of November. The new home sales surged up by 5.2 percent to an annual rate of 592,000 in November from 563,000 in October. The street had expected new home sales to rise by 3 percent to a rate of 580,000. A separate report from the University of Michigan said consumer sentiment improved by even more than initially estimated in the month of December. The University of Michigan said its consumer sentiment index for December was upwardly revised to 98.2 from the preliminary reading of 98.0. The street had expected the index to remain at 98.0, which was still well above the final November reading of 93.8. With the unexpected upward revision, the consumer sentiment index reached its highest levels since January of 2004. The Dow Jones Industrial Average gained 14.93 points or 0.07 percent to 19,933.81, Nasdaq jumped 15.27 points or 0.28 percent to 5,462.69 and S&P 500 was up by 2.83 points or 0.13 percent to 2,263.79.


Crude oil futures moved higher on Friday as traders went for buying ahead of the Christmas break. Though, the market was not very active and traders continue to worry that OPEC will not be able to keep producers in line and force a production cut next year. Also there was report of rise in rig counts. Baker Hughes reported that the number of active U.S. rigs drilling for oil climbed by 13 to 523 rigs for the week, as companies look to take advantage of a yearly high in oil prices. The total active U.S. rig count, which includes oil and natural-gas rigs, also rose by 16 to 653. Benchmark crude oil futures for February delivery gained $0.07 or 0.10 percent to $53.02 on the New York Mercantile Exchange. In London, Brent crude for January delivery ended higher by $0.11 or 0.2 percent at $55.16 on the ICE.


Indian rupee ended one-week high against US dollar on the last trading day of the week due to selling of the American currency by banks and exporters. Traders took some encouragement with some signs of thaw appearing on the GST issue, and the prospects of early roll out of goods and services tax (GST) brightening with the states and the Centre making progress on a crucial legislation, amid indications that the states may get concessions to tide over possible demonetisation-related revenue loss. Besides, dollar weakness against other currencies overseas coupled with some gains in the domestic equity market too supported the local currency. On the global front, the dollar was on the lower side in the light trading ahead of the Christmas break. Finally, the rupee ended at 67.81, 18 paise stronger from its previous close of 67.99 on Thursday.


The FIIs as per Friday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 3642.09 crore against gross selling of Rs 4215.62 crore, while in the debt segment, the gross purchase was of Rs 1247.63 crore with gross sales of Rs 301.04 crore.


The US markets made a positive close in last session, before a long weekend supported by some positive economic reports. The Asian markets are mostly not trading today, while those who are trading have made a mixed start Japanese market opened flat on Monday in quiet holiday trading following a three-day weekend. The Indian markets finally snapped their long losing streak on Friday and the major averages posted modest gains, though the trade remained choppy lacking any major supportive cues. Today, the start of the final week of the calendar year which will also see the F&O series expiry, is likely to be weak one and there will be some concern with Prime Minister Narendra Modi's statement that his government would not hesitate to make tough decisions to help support its growing economy and his suggestion that people earning from financial markets must make a 'fair contribution' to nation building. The comments were interpreted as a pitch for higher taxes on income from capital markets. However, Finance Minister Arun Jaitley has said that the government does not plan to impose a long-term capital gains tax. He also said that his government was doing its best to ensure GST implementation from April 1, 2017.  Traders may remain concerned with domestic rating agency ICRA's  latest report stating that India's gross value added growth is likely to be at 6.6 percent in 2016-17 as economic activity will take more time to normalise following the government's move to demonetise high-value notes. Marketmen may get some support in latter trade with report that the National Academy of Customs, Excise and Narcotics (NACEN), in order to implement the new indirect tax regime, has already trained about three-fourth of the targeted 60,000 field officials. There will be some buzz in realty stocks, as the Prime Minister has said that a law against 'benami' property would be brought in soon.


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  • Wipro has reached an agreement with the US Securities and Exchange Commission to formally resolve the previously disclosed six-year-old investigation.
  • Sun Pharmaceutical Industries' wholly owned subsidiary has acquired 13,000,000 Series B Preferred Stock of scPharmaceuticals Inc. by way of allotment.
  • State Bank of India's largest overseas subsidiary -- Nepal SBI Bank has started point-of-sale services to push digital transactions.
  • Tata Power Delhi Distribution, a joint venture of Tata Power and the Government of Delhi, has been conferred with three prestigious Skoch Awards at the 46th Skoch Summit held at the Constitution Club of India, New Delhi.
  • Tata Steel has executed definitive agreements to acquire 100% equity shares of Brahmani River Pellets from Aryan Mining and Trading Corpn and other companies in the Moorgate Industries Group.
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