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NSE Intra-day chart (27 December 2016)
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Market Commentary 28 December 2016
Markets to make a positive start of the penultimate session of F&O expiry


A session after displaying a stressful performance, Indian equity indices pulled through a sparkling performance by confidently rallying over one and half percent on Tuesday, thanks to the hefty buying in some blue-chip counters, which were heavily over-sold in last few trading sessions and covering-up of pending short positions by speculators ahead of the December futures and options expiry on Thursday. The relentless across the board value picking ensured that the frontline indices settle over the psychological 8,000 (Nifty) and 26,200 (Sensex) levels. Local bourses remained firm despite report that the yearly State Bank of India (SBI) Composite Index, an indicator for tracking India's manufacturing activity, has crashed to an all-time low in December 2016 of 45.5 (moderate decline), compared to last month's revised index of 50 (low growth). The report said factory output, measured by the index of industrial production, may continue to remain in negative territory in December 2016. The sharp up-move was mostly seen as a technical bounce following the brutal mayhem that had pulled stocks in oversold territory. Sentiments got support with FM Arun Jaitley's hint of a lower tax regime; he said that India has been guided by the principle that a lower level of taxation is the key to building a globally competitive economy in the past two and a half decades since liberalization. Some support also came with Union Minister Nitin Gadkari's statement that demonetisation will help to increase government revenue and enable it to allocate more funds to welfare scheme for the people. He further said that India is moving towards a less cash economy like many other countries of the world. Therefore, if something big has to be achieved, then one has to face some difficulties in the beginning. On the global front, Asian markets ended mostly higher on Tuesday amid low-volume trading in the absence of fresh cues. Back home, finally, the BSE Sensex gained 406.34 points or 1.57% to 26213.44, while the CNX Nifty rose 124.60 points or 1.58% to 8,032.85. 


The US markets closed higher on Monday, with the Nasdaq hitting its latest in a series of records as the market's recent upward bias continued, helped by a gain in technology shares. Retail stocks were in focus as investors looked to the first reads on the strength of the holiday shopping season. On the economy front, consumer confidence surged in December to the highest level since 2001, reflecting an improved US economy and anticipation of the incoming Trump administration, especially among older Americans. The consumer confidence index jumped to 113.7 from a revised 109.4 in November. The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers. The price of homes in the US stayed near all-time highs in October and showed no sign of easing. The S&P Case-Shiller index climbed 0.6% in October and was up 5.1% in the past year, unchanged from the prior month. The Dow Jones Industrial Average gained 11.23 points or 0.06 percent to 19,945.04, Nasdaq jumped 24.75 points or 0.45 percent to 5,487.44 and S&P 500 was up by 5.09 points or 0.22 percent to 2,268.88.


Crude oil futures extended their gains to the new week on Tuesday, set to end 2016 at the highest level of the year. Though, the trading activity remained light as many traders remained in holiday mode between Christmas and New Years, but expectations of tighter supply once the first output cut deal between OPEC and non-OPEC producers in 15 years takes effect on Sunday, lifted the crude prices higher. Benchmark crude oil futures for February delivery gained $0.90 or 1.17 percent to $53.90 on the New York Mercantile Exchange. In London, Brent crude for January delivery ended higher by $0.94 or 1.7 percent at $56.10 on the ICE.


Snapping two-day winning streak, Indian rupee ended one-week low against dollar on Tuesday following bouts of month-end dollar demand from banks and importers amid continued capital outflows. Traders remained concerned with the report that the yearly State Bank of India (SBI) Composite Index, an indicator for tracking India's manufacturing activity, crashed to an all-time low in December 2016 of 45.5 (moderate decline), compared to last month's revised index of 50 (low growth). The report said factory output, measured by the index of industrial production, may continue to remain in negative territory in December 2016. Besides, dollar strengthen against other currencies overseas too weighted on the rupee sentiments. On the global front, dollar inched up against the yen and euro, as some investors emerged out of the holiday lull to hunt for bargains as the market entered the last trading stretch of the year. Finally, the rupee ended at 68.06, 32 paise weaker from its previous close of 67.74 on Monday.


The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 1000.07 crore against gross sell of Rs 2099.91 crore, while in the debt segment, the gross purchase was of Rs 120.55 crore with gross sales of Rs 938.82 crore.


The US markets despite coming off the day's high managed a positive close in last session and the tech-heavy Nasdaq surged to a new record closing high after the Conference Board reported a continued improvement in consumer confidence in the month of December. The Asian markets have made a mixed start though the Japanese market was marginally in green in a thin volume trade. The Indian markets went for an unexpected rally and the major benchmarks not only gathered gains of over one and half a percent but reclaimed their crucial psychological levels. Today, the start of the penultimate session of the F&O series expiry is likely to be in green and more short covering can be seen ahead of the series expiry. Traders will also be pondering on Prime Minister's meeting with economists and experts, to take stock of the economy and get feedback on ways to deal with the problem of cash crunch post demonetisation. Reportedly 4-5 sectoral groups have been set up to discuss new initiatives and Budget proposals. The mandate is to come up with concrete suggestions to neutralise the adverse impact of demonetisation, push growth with a special focus on employment generation and promote farm productivity. There will be some cautiousness too in the markets on reports that foreign portfolio investors (FPIs) have pulled out close to $10 billion, or almost Rs 68,000 crore, from the country's debt and equity markets since November 8, in one of the largest selloffs in a two-month period since 2013. There will be some buzz in the aluminium stocks, as India has terminated its investigation on imposition of safeguard or penal duties on imports of aluminium products, on the ground that alleged serious injury or threat of such injury to domestic industry during the period of investigation could not be established.



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Adani Ports






  • ICICI Bank has unveiled mobile app ‘Eazypay' that enables merchants, retailers and professionals to accept instant cashless payments on mobile phones.
  • NTPC's wholly-owned subsidiary - NTPC Vidyut Vyapar Nigam has signed a Power Purchase Agreement with Nepal Electricity Authority to supply 160 MW power.
  • BPCL has tied up with SBI, HDFC Bank and some other major banks to install point of sale terminals for enabling mobile-wallet transactions at its retail outlets.
  • Bharat Heavy Electricals has bagged award for excellence in Research & Development 2016.
  • Bharti Airtel has given network modernisation and expansion contract worth over $120 million to Swedish gear maker Ericsson for Delhi.
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