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NSE Intra-day chart (29 August 2016)
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Market Commentary 30 August 2016
Markets to start the day on a jubilant note


Indian benchmarks showcased an enthusiastic performance in final hours on Monday, by surging around half a percent. After making a cautious start markets traded near neutral lines for most part of the day's trade, but buying activity which took place during last leg of trade helped the frontline indices not only end the session near intraday high levels but also recapture their crucial 8,600 (Nifty) and 27,900 (Sensex) bastions, as investors took to hefty across the board buying. Initially, traders remained cautious after the US Federal Reserve, post its meeting over the weekend indicated increase in interest rate hike during the current calendar year. Depreciation in Indian rupee too dampened sentiments. However, sentiments turned up-beat after federation of Indian Chambers of Commerce and Industry (FICCI) in its latest quarterly report on, manufacturing outlook for the second quarter stated that India's manufacturing sector may witness higher growth during the July-September quarter due to improvement in export prospects and domestic demand. Traders also took some encouragement with reports that in order to ensure that GST is rolled out by April 1, 2017, the government is trying hard to get the winter session of Parliament advanced by a fortnight to pass the bill. Winter Session of Parliament is normally convened in the third or fourth week of November. On the global front, European markets were trading in red terrain in early deals, while most of the Asian equity benchmarks tumbled on Monday. Back home, markets extended the rally in final hour of trade with the Economic Affairs Secretary Shaktikanta Das's statement that India is expected to clock a GDP growth of nearly 8 percent this fiscal on the back of good monsoon rains. He said that Agriculture production is expected to be much better than previous two years and definitely agriculture will contribute significantly to the GDP. Finally, the BSE Sensex surged 120.41 points or 0.43% to 27,902.66, while the CNX Nifty gained 34.90 points or 0.41% to 8,607.45. 


The US markets closed higher on Monday, with the Dow industrials and the S&P 500 index ending a three-session losing streak, as investors calibrated prospects for Federal Reserve rate increases in 2016. The chance of a rate rise delivered a boost to bank shares, which tend to benefit the most in the face of higher interest rates. A closely watched measure of inflation increased, with the so-called PCE index, the Fed's preferred gauge, showing consumer prices climbed closer to the central bank's 2% target in July. On the economy front, Americans increased spending by 0.3% in July, buying more new cars and trucks and devoting more money to utilities such as cooling their homes. Household spending has picked up since the early spring. That's kept the US economy on stable footing and offset weaker businesses investment. Since incomes rose faster than spending, the personal savings rate climbed to 5.7% from 5.5%. The Dow Jones Industrial Average added 107.59 points or 0.58 percent to 18,502.99, Nasdaq was up 13.41 points or 0.26 percent to 5,232.33, while S&P 500 gained 11.34 points or 0.52 percent to 2,180.38. 


Crude oil futures snapped their two days gaining streak on Monday, losing around two percent for the day, as a stronger US dollar dented commodity prices and also on caution over galloping Middle East crude output after Iraqi oil minister said that the nation will continue ramping up output. Meanwhile, the dollar hit a three-week high against the yen after Federal Reserve Chair Janet Yellen bolstered expectations for a rate hike. Benchmark crude oil futures for October delivery dropped $0.80 or 1.70 percent to close at $46.84 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for October delivery declined by $0.77 or 1.5 percent to $49.15 a barrel on the ICE.


Indian rupee depreciated against dollar on Monday after Fed Chair Janet Yellen acknowledged a strengthening economy and said that rates could move higher over coming months. Traders also remained cautious ahead of the gross domestic product (GDP) data for the June quarter and fiscal deficit data for July on 31 August. Besides, dollar strengthened against the other currencies also dampened on rupee sentiment. However, domestic currency got some support with reports that in order to ensure that Goods and Services Tax (GST) is rolled out by April 1, 2017, the government is trying hard to get the winter session of Parliament advanced by a fortnight to pass the bill. Winter Session of Parliament is normally convened in the third or fourth week of November. On the global front, yen weakened against dollar after U.S. Federal Reserve Chair Janet Yellen advocated gradual tightening of interest rates. Finally the rupee ended at 67.17, weaker by 11 paise from its previous close of 67.06 on Friday.


The FIIs as per Monday'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 3118.62 crore against gross selling of Rs 2815.25 crore, while in the debt segment, the gross purchase was of Rs 691.81 crore with gross sales of Rs 739.09 crore. 


The US markets bounced back and ended higher in the last session, following the release of a report from the Commerce Department showing that income and spending rose in line with estimates in the month of July. The Asian markets have made an all green start with some indices surging by over half a percent in early deals tailing the overnight gains in US markets. Some recovery in crude prices has strengthened energy stocks in the region. The Indian markets recovered in the final hours to post decent gains in last session. Today, the start is likely to be in green on sanguine global cues. Traders will also be getting some support with the Reserve Bank of India in its latest report stating that the near-term growth outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6 percent in 2016-17. It has said that a better than anticipated agricultural performance and the possibility of allowances under the 7th Pay Commission's award being paid out in the fourth quarter of 2016-17 provide upsides to this projection. However, pouring cold water on hopes of rate cuts it has said that inflation was running at the upper end of its forecast and that further rate cuts could happen only if inflation falls in the near future. Meanwhile, Niti Aayog Vice-Chairman Arvind Panagariya has said that India's economy will accelerate to 8 per cent growth in the current financial year thanks to a good monsoon, policy reforms and PM Narendra Modi's focus on implementation at the grassroots level. There will be some buzz in the markets with industry and trade representatives set to impress upon the empowered committee of State Finance Ministers about the need to keep the Goods and Services Tax rate at reasonable levels, if not 18 per cent, at a day-long interaction with the committee. Telecom stocks too will be in action, as heeding to the telecom industry's demand for starting spectrum auction from an auspicious date; the government has deferred the mega sale of mobile frequencies by two days to October 1 from the earlier scheduled date of 29th September.


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  • Yes Bank has launched its Indo-Nepal Remittance through its collaboration with 3 banks in Nepal - Global IME Bank, Mega Bank and NMB Bank.
  • Dr. Reddy's Laboratories has launched Nitroglycerin sublingual tablets USP, 0.3 mg, 0.4 mg and 0.6 mg, a therapeutic equivalent generic version of Nitrostat sublingual tablets in the US market on August 26, 2016, having been approved by the United States Food & Drug Administration.
  • Tata Power, Corporate Centre, Carnac building in Mumbai has been awarded with 'IGBC GOLD' rating, under 'Indian Green Building Council's Green Existing Buildings' category for achieving required green building standards.
  • L&T is reportedly planning to scale-up its business in Southeast Asia and Africa. Overseas orders now account for a third of the company's order inflow, up from 10-12 per cent a few years ago.
  • ACC is reportedly planning to enhance its manufacturing capacity to 35 million tonnes per annum from 30 mtpa in the beginning of the year with the addition of a couple of more plants.
News Analysis