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NSE Intra-day chart (28 September 2016)
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Market Commentary 29 September 2016
Markets to make a green start on supportive global cues


The penultimate day of September series futures and options (F&O) contract expiry turned out to be a good session for the Indian frontline equity indices as they managed to settle with gains of around quarter percent after three successive disappointing sessions. Sentiments remained optimistic for most part of the session as Finance Minister Arun Jaitley showed the confidence that the government will meet the April 2017 target to implement the Goods and Services Tax as state finance ministers cooperate to make the single tax reform a reality soon. A strong rebound in European shares amid recovery in global crude oil prices further bolstered trading sentiments. Adding the cheer among the investors, the latest edition of the Global Competitiveness Index of World Economic Forum (WEF) indicated that India is the second most competitive BRICS economy and will grow faster than China this year. The report showed India's competitiveness improved the fastest in 2015-16, jumping 16 places to rank 39th among 138 countries on the index. However, the report also indicated that huge bad loans, lack of infrastructure and stagnating performance on technological readiness are among the major drags on India's global competitiveness. Investors are anxiously awaiting the monetary policy review on October 4, the first to be held under RBI Governor Urjit Patel and the first to be decided by a six-member panel. Furthermore, Asian Development Bank retained its projections for India's economic growth at 7.4% for the current financial year, 0.2 percentage points lower than what was clocked in 2015-16. Meanwhile, banking stocks edged higher on expectation of 25 bps rate cut by RBI in October review, while good buying was also observed in selected sugar stocks on expectation price rises as sugar production is estimated at 23.5 million metric tone in 2016-17 season, down 6.5% year on year. Moreover, oil marketing companies like ONGC, HPCL and BPCL gained traction on sharp plunge in crude oil prices. Finally, the BSE Sensex surged by 69.11 points or 0.24% to 28292.81, while the CNX Nifty gained 38.75 points or 0.45% to 8,745.15.


The US markets closed higher on Wednesday, after OPEC took an important step towards a cap on crude-oil output. The Organization of the Petroleum Exporting Countries reached an understanding to limit crude production and is considering cutting production to between 32.5 million to 33 million barrels a day. The oil-fueled gains come as Federal Reserve Chairwoman Janet Yellen wrapped up her testimony before the House Financial Services Committee and as attention has appeared to shift away from concerns about European banks, namely Deutsche Bank. Yellen stated that the financial condition of the top US banks has strengthened considerably since the financial crisis as she outlined steps the central bank is considering to make bigger banks have larger cushions and have smaller banks face less stringent requirements. On the economy front, orders for durable or long-lasting goods flattened out in August after a sizable gain in the prior month, pointing to ongoing difficulties for American manufacturers. Orders fell 22% for large commercial aircraft, a volatile category that's exhibited large swings during the summer.


Crude oil futures surged to their highest in almost three weeks Wednesday, supported by the hopes of OPEC agreeing to curb production. Reportedly, OPEC agreed to production curbs under a formula to cut output to a range of 32.5 million to 33 million barrels of oil per day from 33.4 million. Also, the EIA reported a 1.9-million-barrel decline in commercial crude inventories in the US to a total 502.7 million barrels. It's the second consecutive significant decline in oil stockpiles. Benchmark crude oil futures for October delivery gained $2.38 or 5.3 percent to close at $47.05 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery surged by $2.72 or 5.9 percent to $48.69 a barrel on the ICE.


Indian rupee ended marginally stronger against the US dollar on Wednesday on fresh selling of American currency by banks and exporters. Local currency got some support after the latest edition of the Global Competitiveness Index of World Economic Forum (WEF) indicated that India is the second most competitive BRICS economy and will grow faster than China this year. The report showed India's competitiveness improved the fastest in 2015-16, jumping 16 places to rank 39th among 138 countries on the index. However, FIIs selling in domestic equity market capped the rupee gains. On the global front, the dollar rose against the yen and a basket of currencies, with the focus shifting to Federal Reserve chair Janet Yellen's semi-annual testimony before a Congressional committee later in the day. Finally, the rupee ended at 66.47, 1 paise stronger from its previous close of 66.48 on Tuesday.


The FIIs as per Wednesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 4607.60 crore against gross sell of Rs 3802.01 crore, while in the debt segment, the gross purchase was of Rs 3119.32 crore with gross sales of Rs 1394.74 crore.


The US markets moved higher in last session despite fluctuating through the day and the major averages managed to add to the notable gains posted in the previous session, supported by gains in crude prices. The Asian markets have made an all green start, with Japanese market bouncing back and trading higher by over a percent in early deals as the yen weakened after the OPEC members agreed a preliminary deal to cut crude production for the first time since 2008. The Indian markets posted gains of about a quarter percent in last session; the trade remained mostly steady with some buying appearing in the final hours. Today, the start of the F&O series expiry day is likely to be in green, on positive global cues. Traders will be getting some support with Finance Minister Arun Jaitley's statement, who reacting to 32-point jump on World Economic Forum's Global Competitiveness Index in two years, has said that it shows India has covered a long distance and is well on its way to emerge as a major player in global economy. Also, in a run-up to the GST roll out, the Cabinet has approved Rs 2,200-crore Saksham project, a new indirect tax network of the Central Board of Excise and Customs (CBEC). This would help integrate CBEC IT systems with the Goods and Services Tax Network (GSTN). Markets however can turn volatile due to series expiry and traders rolling over their positions to next series. There will be some buzz in banking sector, with the RBI Deputy Governor SS Mundra's statement that Banks may have to set aside more money as buffer against bad loans (non-performing assets) as recoveries are becoming difficult and resolutions few and far between. The PSU stocks too will be in action, as the Centre has approved a strategic sale in loss-making Bharat Pumps and Compressors Limited. There will be some buzz from the primary market too, as the ICICI Pru Life will be getting listed today.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Idea Cellular





  • M&M has agreed to acquire the European two-wheeler subsidiary company of Mahindra Two Wheelers for euro 26.3 million.
  • SBI has issued and allotted 25,000 AT1 Basel III compliant Non- convertible, Perpetual, Subordinated, Unsecured Debt instrument in the nature of debenture, of face value Rs 10 lakh each at par through private placement bearing coupon at 8.75% per annum.
  • Infosys has launched Skava Commerce, a modern, mobile-first and modular e-commerce platform that delivers engaging omni-channel experiences.
  • Tech Mahindra has successfully completed the first phase of transformation at OG&E.
  • Bharti Airtel has launched new International Roaming packs that redefine the value proposition for customers traveling abroad.
News Analysis