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NSE Intra-day chart (30 May 2016)
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Market Commentary 31 May 2016
Markets to extend the gains with a positive start


Monday's trading session was clearly of consolidation and the Indian benchmark indices appeared a bit fatigued and remained in directionless trajectory throughout the day. Nevertheless, the benchmarks managed to extend the winning momentum for the fifth consecutive day of trade. Investors got some confidence with the report that India is one of the best-placed among emerging market economies as domestic factors have started to turn 'incrementally positive' indicating a nascent recovery.  According to the report, several economic data such as electricity generation, cement production, diesel consumption and tractor growth are showing a sharp improvement over 2015.  Besides, the expectation that the Reserve Bank is likely to keep key rates unchanged in the next policy meeting on June 7, but might lower rates by another 50 bps during the current financial year, added to the optimistic sentiments. Some support also came with the report that a normal monsoon this year is expected to provide 20% boost to the income of farmers, whose debt leverage has touched 22% following two years of droughts. On an average, farmers' income has come down by 3 per cent in 2014-15 and by 4 per cent in 2015-16. However, some traders remained cautious as India Ratings and Research stated that the economic growth of the country is expected to be 7.5% in 2015-16, lower than advance estimate of 7.6% by the Central Statistics Office. On the global front, buoyed by a weaker yen, Japanese stocks les Asian markets higher, the European stocks opened mostly higher. Back home, the benchmark got off to a positive opening, in tandem with the cautiously optimistic sentiments prevailing in Asian markets. The key indices soon capitalized on the momentum and touched intraday highs but the indices failed to hold onto the highs and receded to lower as investors opted to book some of their profits at higher levels. Finally, the BSE Sensex gained 72 points or 0.27% to 26725.60, while the CNX Nifty rose 21.85 points or 0.27% to 8,178.50.


The US markets remained closed on Monday on account of 'Memorial Day' holiday.


Crude oil futures inched up in a holiday thinned trade on Monday, as the floor trading remained closed on account of Memorial Day holiday. Tough uncertainty ahead of an OPEC producer-group meeting later in the week capped the gains, also there was some concern that an expected rise in Canadian oil sands production could weigh on WTI.  Meanwhile, the Organization of the Petroleum Exporting Countries meets in Vienna on Thursday.  Benchmark crude oil futures for July delivery inched up by $0.27 to $49.60 a barrel on the New York Mercantile Exchange. In London, Brent crude for July delivery closed at $49.79, up $0.47 percent on the ICE.


Indian rupee snapped its gaining streak on Monday and pared some of the gains gathered in previous week, following month-end dollar demand from importers and banks. The weakness in other regional currencies too weighed on the domestic currency and traders largely ignored the extended gains in the local equity markets, which ended with modest gains. Traders also remained cautious ahead of the release of the gross domestic product (GDP) and fiscal deficit data on 31 May. On the global front, the dollar held steady at two-month highs against the other major currencies on Monday, on signal by Fed chief Janet Yellen about the upcoming rate hikes. Finally, the rupee ended at 67.17, 14 paise weaker from its previous close at 67.03 on Friday.


The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity, the gross buying was of Rs 4629.74 crore against gross selling of Rs 3971.70 crore, while in the debt segment, the gross purchase was of Rs 1462.06 crore with gross sales of Rs 269.80 crore.            


The US markets remained closed in last session on account of Memorial Day holiday, unable to give any cues to the other global markets. The Asian markets have made mostly a positive start, with some of the indices extending their gains amid optimism the global economy is strong enough to withstand a potentially imminent rate hike in US. The Indian markets despite some cautiousness and a range bound trade managed to move modestly higher in last session, extending the gaining streak for yet another day. Today, the start is likely to be in green tailing the supportive regional cues, however all eyes will be on gross domestic product (GDP) data for the fourth quarter (January-March) of 2015-16 slated to be released after the market hours. CSO had forecast that the Indian economy will grow at 7.6% in the year ended 31 March. Traders will be getting some encouragement with International Institute for Management and Development (IMD)'s World Competitiveness Center report, which has stated that India climbed three spots and China dropped an equal number of places in the 2016 rankings. India improved its overall performance, image, openness, and managerial practices. Traders will also be getting some encouragement with former Singapore Prime Minister Goh Chok Tong's statement that amid concerns of a slowing global growth, India is a beacon of hope and has the potential to drive the world economy for the next 10 years. Aviation stocks will be in action on report of global airlines' association that India's domestic passenger traffic grew by 21.8% in April. There will be some earnings announcements and scrip specific actions based on the result announced, to keep the markets buzzing.


Support and Resistance: NSE Nifty and BSE Sensex



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  • Coal India has posted a rise of 44.87% in its net profit at Rs 13950.12 crore for the quarter ended March 31, 2016 as compared to Rs 9629.23 crore for the same quarter in the previous year.
  • Tech Mahindra has entered into an agreement to acquire Target Group, one of the leading processing platform companies in the UK.
  • M&M has posted a rise of 6.02% in its net profit at Rs 583.73 crore for the quarter ended March 31, 2016 as compared to Rs 550.56 crore for the same quarter in the previous year.
  • In a bid to capture 25% share in the Indian motorcycle market, Bajaj Auto is planning to invest Rs 575 crore this fiscal, a major chunk of which will be used for launch of new products.
  • In a bid to fund its capital expenditure plans, Power Grid Corporation of India is planning to raise Rs 14,000-15,000 crore through domestic bonds.
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