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NSE Intra-day chart (27 May 2016)
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Market Commentary 30 May 2016
Another positive start on cards for the local markets


Indian benchmark indices carried forward their northbound journey for yet another session on Friday, on the back of slew of positive news and strong earnings from index companies. BPCL stocks jumped over eight percent, hitting a record high, after the state-run oil marketing company beat Q4 earnings estimate and announced a 1:1 bonus share issue, while Jet Airways rose after the country's second-biggest airline by passengers reported an annual profit for the first time since 2007 and a year ahead of schedule under its 2014 turnaround plan. Investors remained on the optimistic mood from the start of the trade with the global rating agency Fitch in its Global Economic outlook stating that India's economic growth will accelerate to 8 percent by 2018-19 fiscal as gradual implementation of structural reforms will contribute to higher growth. The report further highlighted that India's GDP will grow 7.5% in fiscal year ending March 2016 and improve to 7.7% in the current fiscal year and further to 7.9% in the fiscal year ending March 2018.  Also, some boost came with Commerce Minister Nirmala Sitharaman stating that it is 'possible' for the country to reach top 50 in the World Bank's Doing Business ranking in the next few years. India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from 2014, according to the latest World Bank's Doing Business report.  Mirroring the optimism, foreign investors have bought Indian shares worth a net $119.73 million so far this month, taking this year's inflows to $1.92 billion. Besides, hopes of economic recovery, better than expected corporate results this quarter, strength in rupee and prediction of above average monsoon also lifted sentiments higher. On the global front, Asian markets ended modestly higher on Friday as investors maintained a cautiously optimistic outlook, while European markets traded lower in early deals. Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. The bourses further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. Finally, the BSE Sensex surged 286.92 points or 1.09% to 26653.60, while the CNX Nifty rallied 87 points or 1.08% to 8,156.65.


The US markets ended in green on Friday after Fed Chair Janet Yellen said she expects the economy to continue to improve and said it may be appropriate for the Fed to raise rates in the coming months. The Fed Chief also said she expects inflation to move back up to the central bank's 2 percent objective as crude oil prices have steadied near $50 a barrel after plunging to $26 a barrel earlier in the year. Traders also took some encouragement with report showing the pace of GDP growth in the first quarter was upwardly revised to 0.8 percent from the initial estimate of 0.5 percent. Nonetheless, the revised GDP growth in the first quarter compares to the 1.4 percent jump seen in the fourth quarter and the 0.9 percent increase expected by economists. Meanwhile, a separate report from the University of Michigan showed a modest downward revision to its consumer sentiment index for May, although the index was still at an eleven-month high. The Dow Jones Industrial Average edged higher by 44.93 points or 0.25 percent to 17,873.22, S&P 500 gained 8.96 points or 0.43 percent to 2,099.06 and Nasdaq was up by 31.74 points or 0.65 percent to 4,933.50.


Crude oil futures eased on Friday, remaining below $50 a barrel mark, on long-term supply concern with expectations that Canadian oil sands production will be ramping up, the strength in dollar following relatively hawkish remarks by Federal Reserve chair Janet Yellen, who at a closely-watched speech in Cambridge, indicated that it could be appropriate for the U.S. central bank to lift rates in the coming months, also kept crude oil in check. However, energy traders continued to monitor developments in Nigeria, one day after the Niger Delta Avengers, a Southern Nigerian insurgent group claimed responsibility for an explosion that shut down operations at a Chevron Corporation facility. Meanwhile, oil services firm Baker Hughes said in its weekly rig count report that U.S. oil rigs fell by two to 316 for the week ending on May 20. The rig count stood at 646 at this time last year. Benchmark crude oil futures for July delivery ended at $49.27, down $0.21 or 0.42 percent after trading in a range of $48.70 and $49.47 a barrel on the New York Mercantile Exchange. In London, Brent crude for July delivery ended at $49.22, down $0.37 or 0.75 percent on ICE.


Indian rupee continued its gaining streak on Friday taking cues from the strength in other regional currencies against the dollar. The rupee got additional support with the local equity markets surge, which moved higher for the fourth straight session, raising hopes of more fund inflows. The domestic currency remained strong from the beginning although there was some cautiousness ahead of the gross domestic product (GDP) data which is due on next week. The government will release GDP data for the March quarter on 31 May after 5.30pm. On the global front, the US dollar stayed in consolidation mode after its rally to two-month highs ran out of steam with traders looking for fresh guidance from the head of the US central bank. Finally, the rupee ended at 67.03, 13 paise stronger from its previous close at 67.17 on Wednesday.


The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity, the gross buying was of Rs 6500.80 crore against gross selling of Rs 5780.45 crore, while in the debt segment, the gross purchase was of Rs 1052.65 crore with gross sales of Rs 921.50crore.            


The US markets made a positive close in last session, with major averages recovering from their lowest levels in about two months, despite the Federal Reserve Chair Janet Yellen, hinting at the likelihood of a summer time interest rate hike. The Asian markets have made a mixed start and some of the indices are trading marginally in red, though the Japanese shares surged around a percent after yen extended its slump against the dollar with Federal Reserve chief stating that rate hikes could come in the next few months. The Indian markets remained in jubilant mood in last session, extending gains on broad based buying. Today, the start of the new week is likely to be in green with major bourses further enlarging their gains, though traders will be a bit cautious too ahead of the release of national income figures for fourth quarter, as well as for 2015-16, due on Tuesday. India Ratings and Research has meanwhile said that the economic growth is expected to be 7.5 percent in 2015-16, lower than advance estimate of 7.6 percent by the Central Statistics Office. Some buzz can be seen in infra stocks, as Finance Minister starting his 6-day visit to Japan aimed at attracting investments from Asia's second biggest economy, has said that a number of Japanese investors have shown keen interest in investing in India's infrastructure growth story. Steel stocks too will be buzzing with global industry body World Steel Association's (WSA) report that India, the world's third largest steel producer, was among the top 10 importers of the alloy last year. There will be lots of earnings announcements too, to keep the markets in action.


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Tata Motors






  • Pharma Major Lupin has received Establishment Inspection Reports for its Mandideep and Aurangabad facilities wherein the US FDA has concluded that the inspections stand closed.
  • Sun Pharmaceutical Industries has terminated the umbrella pact and transaction agreements with Daiichi Sankyo and its overseas subsidiaries due to divestment of Ranbaxy by the Japanese firm.
  • NTPC has decided to raise Rs 1,072.50 crore through private placement of secured non-convertible debentures at a coupon of 8.10% per annum with a door to door maturity of 15 years.
  • Maruti Suzuki Indi will proactively and voluntarily recall 75,419 Baleno cars, manufactured between August 3, 2015 and May 17, 2016 to upgrade the airbag controller software.
  • Bharat Petroleum Corporation has posted a fall of 10.65% in its net profit at Rs 2549.08 crore for the quarter ended March 31, 2016 as compared to Rs 2852.89 crore for the same quarter in the previous year.
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