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NSE Intra-day chart (27 October 2016)
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Market Commentary 28 October 2016
Markets to make a cautious start of the new series on mixed global cues


Indian equity markets that started the session on a sluggish note managed to eke out modest gains by the end of trade, as the benchmark indices clawed back into the green terrain in the last leg of trade on account of renewed buying interest by traders to square off F&O positions on expiry of October series. Sentiments got some support with report that Prime Minister Narendra Modi has asked secretaries at the Centre and chief secretaries in the state to analyse the World Bank's Ease of Doing Business Report. Modi's remarks came hours after commerce and industry minister Nirmala Sitharaman said she was disappointed that the efforts and reforms undertaken by the Centre and the states had not been adequately captured. Sitharaman further added that the government intends to achieve the prime minister's vision of ensuring that India finds a place in the top 50. Further, indicating a sense of confidence among global investors, latest data from the SEBI showed that more than 1,300 new foreign portfolio investors (FPIs) have registered with capital markets regulator SEBI in April-August of 2016-17, showing a sign of their willingness to be part of India's growth story. In the last fiscal, a total of 2,900 FPIs had received approval from SEBI. The number of FPIs with SEBI approval increased to 5,626 at the end of August from 4,311 in March-end, reflecting an addition of 1,315 such investors. FPI investors consider India as a preferred and stable market, given its macro-economic stability, long-term growth prospects and ongoing economic and social reforms. However, gains remained capped with the report that the Reserve Bank may not be able to achieve its medium term target of 4% inflation, even if food prices are managed as health and education prices could play spoil sport. Besides, disappointing earnings by some heavyweights and weak trade in other regional markets too weighed on market sentiment. On the global front, Asian markets ended mostly lower on Thursday as investors awaited a fresh batch of data for indications on the state of the world economy, while European stocks edged lower in early trade. Back home, finally, the BSE Sensex gained 79.39 points or 0.29% to 27915.90, while the CNX Nifty ended flat at 8,615.25. 


The US markets closed lower on Thursday, fluctuating between slight gains and losses, as a jump in bond yields prompted a selloff in defensive sectors such as real estate, while investors sifted through mixed earnings results and deal news. On the economic front, orders for long-lasting goods made in the US fell slightly in September, a weak performance owing largely to lower demand for military hardware and computers. Business investment also posted the biggest drop in seven months, reflecting a tough environment for American manufacturers still coping with uneven demand and tepid spending. The decline in September, the first in three months, stemmed from a 45% plunge in bookings for large military goods such as fighter jets. Core orders slumped 1.2% last month and they are down 4.1% over the past year. Orders are off an even larger 10.9% from the post-recession peak in September 2014. On the other hand, the number of people who applied for unemployment benefits last week stretching from October 16 to October 22 fell by 3,000 to 258,000, extending a period of extremely low layoffs last seen in the early 1970s. The Dow Jones Industrial Average lost 29.65 points or 0.16 percent to 18,169.68, Nasdaq dropped 34.30 points or 0.65 percent to 5,215.97, while S&P 500 was down 6.39 points or 0.30 percent to 2,133.04.


Crude oil futures made some recovery on Thursday, though the unclear picture about production cut limited the gains. It was reported that Saudi Arabia and a few other OPEC members are ready to cut production, while Iraq wants an exemption and is threatening to derail OPEC's agreement to cut production. Saudi Arabia and its Gulf OPEC allies are willing to cut 4% from their peak oil output, while Russia said that Moscow would not cut output, but rather freeze it at current levels. Benchmark crude oil futures for October delivery gained $0.54 or 1.1 percent to close at $49.72 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery was up by $0.35 or 0.70 percent to $50.33 a barrel on the ICE.


Indian rupee depreciated for the second consecutive session against the US dollar amid month-end dollar demand from importers. Sentiments remained dampened with the private report that the Reserve Bank of India may not be able to achieve its medium term target of 4% inflation, even if food prices are managed, as health and education prices could play spoil sport. Traders failed to get any sense of relief with report that more than 1,300 new foreign portfolio investors (FPIs) have registered with capital markets regulator SEBI in April-August of 2016-17, showing a sign of their willingness to be part of India's growth story. On the global front, dollar held steady near a three-month high against the yen on Thursday, as rises in US bond yields and expectations for the Federal Reserve to raise interest rates this year helped underpin the greenback. Finally, the rupee ended at 66.87, 5 paise weaker from its previous close of 66.82 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 3904.79 crore against gross sell of Rs 5417.57 crore, while in the debt segment, the gross purchase was of Rs 655.37 crore with gross sales of Rs 802.50 crore. 


The US markets closed mostly lower in last session, as traders digested the latest batch of earnings news, with a slew of well-known companies releasing their quarterly results. Traders largely ignored the report of Labor Department showing a modest drop in initial jobless claims in the week ended October 22nd. The Asian markets have made a mixed start amid speculation major central banks are moving closer to reining in stimulus, however the Japanese market rallied with gains of about half a percent as the yen traded near its weakest level since July. The Indian markets bounced back in second half with lots of short covering appearing towards the expiry of the October F&O series and ended with modest gains. Today, the start of the new series will remain cautious and traders will be opting selective bets lacking any major cues amid mixed global trade. Some support may come with Finance Minister Arun Jaitley's statement that the economic situation in Asia is not as pessimistic as the rest of the world, and it has a higher growth potential. Though, he also said India will have to undergo rapid urbanisation in the next two decades and conceded that management or urban infrastructure, especially of water will become a serious challenge. The PSU stocks will be in action, as the cabinet on Thursday gave in-principle approval to strategic stake sales in some state-owned companies on the recommendations of the government think tank NITI Aayog. The sugar stocks too may show reaction to government's decision to extend stock limits on sugar traders by another six months till April 2017 in order to check sweetener prices, which at present are ruling around Rs 40 per kg. There will be lots of earnings too to keep the markets buzzing.


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  • Hero MotoCorp has received an approval for investment of up to Rs 205 crore in one or more tranches, for approximately 26-30% shareholding in Ather Energy.
  • Sun Pharmaceutical Industries' wholly owned subsidiary has launched the Authorized Generic versions for all strengths of Benicar, Benicar HCT, Azor and Tribenzor in US.
  • Dr. Reddy's Laboratories has entered into a strategic collaboration with Gland Pharma, a globally recognized developer and manufacturer of sterile dosage forms, to market and distribute a diverse portfolio of eight injectable Abbreviated New Drug Applications in the US market.
  • Maruti Suzuki India has reported 60.19% rise in its standalone net profit at Rs 2398 crore for the quarter ended September 30, 2016 as compared to Rs 1497 crore for the same quarter in the previous year.
  • ONGC has   reported 6.27% rise in its net profit at Rs 4974.92 crore for the quarter ended September 30, 2016 as compared to Rs 4681.39 crore for the same quarter in the previous year.
News Analysis