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NSE Intra-day chart (29 March 2016)
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Market Commentary 30 March 2016
Markets to get a strong start on the penultimate session of F&O expiry


After remaining volatile throughout the session, Indian equity benchmarks ended the session on a weak note on Tuesday, as investors turned jittery ahead of the expiry of monthly derivative contracts later this week and a speech from Federal Reserve Chair Janet Yellen later in the day. Yellen's speech comes after a chorus of hawkish comments from other Fed officials unsettled global markets last week, casting doubt about a revival of foreign investments into emerging markets. On the domestic front, sentiments got undermined by the Finance Minister Arun Jaitley's statement that India needs to further ease its business processes to boost foreign and domestic investments, as he admitted that the country has been impacted by global trade shrinkages. Further, market participants turned cautious with the report that Indian business sentiment fell for the first time in three months in March as companies faced lower demand amid rising input prices adding to expectations of an interest rate cut by the Reserve Bank.  The MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, fell to 62.7 in March from 63.5 in February. However, investors got some comfort with Prime Minister Narendra Modi's statement that India will live up to the global expectation of being a bright spot for growth with requisite policy as also administrative reforms on a sustained basis. On the global front, Asian markets ended mixed, while European equities climbed higher in early trading. Back home, Indian bourses got off to a somber opening, extending the downtrend for the second straight session as pessimistic sentiments prevailed across Asian markets. After getting weak start, Indian benchmarks showed some strength, but the sentiments turned pessimistic in late morning trades and indices started drifting lower, lacking any significant upside cues. Finally, the BSE Sensex declined by 65.94  points or 0.26% to 24900.46, while the CNX Nifty dropped 18.10 points or 0.24% to 7,597.00.


The US market closed higher on Tuesday, with the S&P 500 and the Dow Industrial rising to their highest close of 2016 after Federal Reserve Chairwoman Janet Yellen emphasized a cautious approach to normalizing monetary policy in light of fears about the domestic and international economy. Yellen, spoke optimistically about the US economy, particularly the strong gains in the job market and resilient consumer spending. But when she turned to the global economy, it got gloomy. Yellen added that it was too early to tell if the recent pickup in inflation would last and that the Fed needed to proceed cautiously on raising benchmark interest rates given global risks. On the economy front, consumer confidence jumped in March, reflecting more optimism among Americans as stock markets rebounded from steep losses early in the year and worries about a recession faded. The index of consumer confidence climbed to 96.2 last month. The index reading for February was also revised higher to 94.0 from 92.2. The Dow Jones Industrial Average rose 97.72 points or 0.56 percent to 17,633.11, Nasdaq gained 79.83 points or 1.67 percent to 4,846.62 while, S&P 500 was up 17.96 points or 0.88 percent to 2,055.01.


Crude oil futures continued their decline and suffered sharp fall on Tuesday, as traders increased their short positions in crude amid longstanding worries related to an excessive supply glut on global energy markets.  Though, crude pared some losses following dovish remarks from Janet Yellen on the Federal Reserve's intentions to maintain a gradual path for future interest rate hikes.  Benchmark crude oil futures for May delivery plunged by $1.04 or 2.64 percent to $38.35 a barrel after trading in a range of $37.92 and $39.46 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $39.95, down $0.92 or 2.25 percent on the ICE.


Indian rupee ended stronger against dollar on Tuesday taking its winning streak for third straight session on continued dollar selling by banks and exporters. The domestic currency was looking strong from the very beginning; however gains remained capped due to losses in domestic equity market. Investors got some comfort with Prime Minister Narendra Modi's statement that India will live up to the global expectation of being a bright spot for growth with requisite policy as also administrative reforms on a sustained basis. On the global front, dollar rose against a basket of currencies on Tuesday, as European investors returned from an Easter break, with the focus on a speech by Federal Reserve chair Janet Yellen who could lay the ground for interest rates hikes later this year. Finally, the rupee ended at 66.54, 3 paise stronger from its previous close of 66.57 on Wednesday.


The FIIs as per Tuesday'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 5513.53 crore against gross selling of Rs 3264.25 crore, while in the debt segment, the gross purchase was of Rs 432.83 crore with gross sales of Rs 745.33 crore.         


The US markets made a bounce back as Yellen's speech to the Economic Club of New York was seen as dovish regarding the outlook for interest rates. Yellen said she considers it appropriate for the Fed to proceed cautiously in adjusting monetary policy given the risks to the economic outlook. The Asian markets have made mostly a strong start with many of the indices trading higher by over a percent on Janet Yellen's reassertion of the central bank's gradual approach to raising interest rates. The Indian markets showed a choppy trade in the last session and closed marginally in red despite making a good recovery attempt in the final hours. Today, the start of the penultimate session of the F&O series expiry is likely to be on a jubilant note and the markets will be showing good upmove in early deals, on euphoric global cues. There will be buzz in the market, as the government has allowed 100 percent foreign direct investment (FDI) through automatic route in the marketplace format of e-commerce retailing, though FDI has not been permitted in inventory-based model of e-commerce. Meanwhile, Finance Minister Arun Jaitley has said that India's decision to open various sectors to foreign direct investment (FDI) has helped the country. Traders will also be getting some support with Finance Minister's statement that he will reach out to the Congress again to persuade it to support the much delayed GST bill in second half of the Budget Session beginning next month. Banking stocks will be in action, as the Reserve Bank of India has tweaked its rule asking banks to use the marginal cost of funds formula to calculate interest rate for loans with fixed tenure of less three years. There will be some buzz in the telecom stocks, as the global rating agency Moody's Investors Service has said that telecom tower companies in India will post a revenue growth of about 10 percent over the next two years as mobile operators are expanding their 3G and 4G footprint and will seek to lease more tower space.


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  • HDFC Bank is all set to raise up to Rs 5,000 crore by way of infrastructure bonds.
  • NTPC has commissioned Unit-3 of 660 MW of Mouda Super Thermal Power Station on March 28, 2016.
  • ONGC has received its board approval to invest Rs 34,000 crore to bring into production a flagship hydrocarbon block in the Krishna-Godavari basin off the Andhra coast.
  • Adani Ports and special economic zone has raised Rs 500 crore through issue of debentures on private placement basis.
  • Lupin has received a total of 3 observations relating to violation of production norms at manufacturing facilities at Mandideep, Madhya Pradesh from the US Food and Drug Administration.
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