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NSE Intra-day chart (29 June 2016)
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Market Commentary 30 June 2016
Markets to make a strong start of the F&O series expiry session


Indian benchmark indices staged a blockbuster performance on Wednesday by vehemently surging close to a percent in the session, with auto and retail sector shares rallying after the government approved a long-awaited pay hike for its employees, while sentiment was also boosted by a global relief rally as the immediate impact of Brexit began to fade. Meanwhile, the union cabinet approved the recommendations of the Seventh Pay Commission, a move which will boost consumption by putting extra disposable income in the hands of the central government's 4.7 million employees. Furthermore, metal and mining stocks also get some light after the Cabinet approved the National Mineral Exploration Policy (NMEP), which will pave the way for auction of 100 prospective mineral blocks, boosting India's mining potential. Investors got some comfort with the Government's assurances that it has enough support for passage of the GST bill in the Monsoon session of Parliament that will commence from July 18 till August 12. Also, Reserve Bank of India's (RBI's) Financial Stability Report (FSR) stated that despite global uncertainties, banking sector issues, the economy stands out in terms of growth as compared to other emerging markets and the Indian financial system remains stable. Some support also came with the Economic Affairs Secretary Shaktikanta Das' statement that India is posed for a "big leap" in growth which could touch 8 percent in the current fiscal on the back of normal monsoon. However, many large market patients remained cautious with the Morgan Stanley's report that Brexit is likely to have an adverse impact on India's growth with domestic GDP expected to decline by up to 60 basis points in a high-stress scenario within the next two years. On the global front, Asian markets ended on firm note, while the European shares too rose. Back home, the local benchmarks got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Thereafter, the frontline indices slowly but steadily started gathering steam and surged by over half a percent by late morning trades. 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 215.84 points or 0.81% to 26740.39, while the CNX Nifty rose 76.15 points or 0.94% to 8,204.00.


The US markets closed higher on Wednesday, rallying for a second day as a surge in crude-oil prices and a receding Brexit fears pared sharp losses stemming from the UK's surprise vote to leave the European Union. A US Energy Information Administration report showed a sharp drop in domestic crude supplies sent oil prices soaring, which carried energy and materials shares higher. Investors have shown that they are willing to wait for more clarity about the timeline and details of the UK's exit from the EU, dubbed Brexit. They are now shifting their attention to monetary policy, corporate earnings and the US economic outlook. Though, the Fed has stayed mum about how the Brexit vote might affect its outlook, investors now expect it will stay on hold for the rest of the year. Meanwhile, the US Federal Reserve stated that the nation's largest banks appear to have the financial muscle to withstand ugly economic scenarios, like a housing market crash or double-digit unemployment. On the economy front, Americans moderated their spending in May after splurging in April, but the pace of consumer purchases in the past two months points to a strong rebound in US economic growth in the second quarter. Outlays rose 0.4% last month after following a revised 1.1% increase in April. The Dow Jones Industrial Average was up by 284.96 points or 1.64 percent to 17,694.68, Nasdaq added 87.38 points or 1.86 percent to 4,779.25, while S&P 500 gained 34.68 points or 1.70 percent to 2,070.77.


Crude oil futures extended their rally mood on Wednesday and surged considerably, once again nearing the $50 a barrel mark. Traders took encouragement with the US Energy Information Administration (EIA) report of crude inventories falling sharply last week, helping ease long-term concerns of oversupply. EIA reported that US commercial crude oil inventories decreased by 4.1 million barrels for the week ending on June 24. Benchmark crude oil futures for August delivery surged by $1.93 or 4.00 percent to $49.81 a barrel after trading in a range of $47.99 and $50.00 a barrel on the New York Mercantile Exchange. In London, Brent crude for September delivery closed at $51.23, up $1.97 or 4.00 percent on the ICE.


Indian rupee ended substantially stronger against dollar on Wednesday on increased selling of American currency by banks and exporters. Besides, surge in domestic markets added to the positive milieu of rupee. Further, weakness of the dollar against other currencies overseas gave the rupee some support. Investors got support with the Reserve Bank of India's Financial Stability Report (FSR), which stated that despite global uncertainties, banking sector issues, the economy stands out in terms of growth among its peers. On the global front, euro hover above their post-Brexit lows, though the battered European currencies remained hampered by longer term uncertainty and yen had surged, after Britain's decision to leave the European Union sent shockwaves around markets on Friday. Finally, the rupee ended 67.68, 27 paise stronger from its previous close at 67.95 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity, the gross buying was of Rs 3663.10 crore against gross selling of Rs 3878.40 crore, while in the debt segment, the gross purchase was of Rs 1658.68 crore with gross sales of Rs 1422.22 crore.            


The US markets extended their gaining streak in a post Brexit recovery, with the major averages further offsetting the sell-off. Traders largely shrugged off the Commerce Department report showing that personal income rose by slightly less than expected in May. The Asian markets have once again made a strong start, extending their gains along with currency, even though the crude prices fell. The Indian markets surged in last session, with the major indices posting gains of around a percent, as traders resorted to broad based buying on some encouraging developments, marketmen also rejoiced the good progress of monsoon. Today, the start of the F&O series expiry day is likely to be strong. The hopes of rise in consumer demand with the government approving the proposals of Seventh Pay Commission will keep supporting the markets, though it has also raised concern of spike in inflation and meeting the fiscal deficit target. The cabinet has cleared the recommendations of the Commission according to which the overall hike in salary and allowance of central government employees and pensioners comes to 23.5 percent. Traders will also be getting some support with Parliamentary Affairs Minister Venkaiah Naidu's statement that the government will seek to ensure that the bill on a pan-India goods and services tax (GST) will be passed in the upcoming session of parliament, scheduled from July 18 to August 12. Auto, consumer durables and FMCG sector stocks will continue to show upmove, while for the Auto companies especially the diesel vehicle makers, there will be additional cheer with the Supreme Court saying that it is considering lifting the ban on sale of these vehicles in the national capital region on payment of a green cess. 



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  • SBI is planning to raise up to $1,500 million via a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during the FY 2016-17.
  • Larsen & Toubro's infotech arm L&T Infotech is set to launch its 1.75 crore equity shares Initial Public Offer for subscription on July 11, which will close on July 13.
  • Axis Bank, the country's third largest private sector bank has forayed into urban microfinance segment and will now provide collateral free credit facilities to low-income women groups.
  • GAIL India, the nation's biggest natural gas transporter, has begun supplying gas to the India unit of the world's largest automotive aluminium wheel producer Wanfeng Group.
  • Tata Steel is planning to invest hundreds of millions of euros in modernising its Dutch operations at Hoogovens plant in Ijmuiden.
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