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NSE Intra-day chart (06 April 2021)
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Market Commentary 07 April 2021
Markets likely to open cautious ahead of the monetary policy announcement


Indian benchmark indices ended marginally higher after a volatile trade on Tuesday led by gains in Healthcare, Industrials and Basic Materials stocks. After making cautious start, benchmark indices traded higher with gains of over half a percent in morning deals, as sentiments got boost with data showing that India has attracted record total FDI inflow for the first ten months of a financial year in 2020-21. Accordingly, the inflow rose to $72.12 billion during April to January, 2021, 15 per cent higher as compared to the first ten months of 2019-20, when it stood at $62.72 billion. The FDI equity inflow grew by 28 per cent in the first ten months of FY 2020-21 ($54.18 billion) compared to the year ago period ($42.34 billion). Some support also came in as the country witnesses a rapid resurgence of coronavirus cases, a Finance Ministry report has exuded confidence in the Indian economy and termed the economic recovery as resilient citing improvement in high frequency indicators. The Monthly Economic Review for March 2021 released by the Department of Economic Affairs (DEA) said that the agricultural sector remains the bright spot of Indian economy with foodgrains production touching 303.3 million tonnes in 2020-21 beating record production levels for the fifth consecutive year in a row. However, key gauges were unable to sustain most of the gains by the end of the trade, as traders remine concerned with Care Ratings' statement that Maharashtra's radical lockdown move will have an economic impact of Rs 40,000 crore, with the trade, hotels and transport sector to bear the biggest dent. The rating agency said the loss of economic activity will have a 0.32 per cent impact on the gross value added (GVA) growth at the national level. It revised down its national GDP growth estimate to 10.7 - 10.9 per cent from the 11 - 11.2 per cent given a week ago. Some concern also came with ICRA Ratings' report stated that as the impact of various relief measures, including a moratorium on loan repayment and asset classification standstill wanes off, gross non-performing assets of banks may likely rise to 9.6-9.7 per cent by March 31, 2021. Finally, the BSE Sensex rose 42.07 points or 0.09% to 49,201.39, while the CNX Nifty was up by 45.70 points or 0.31% to 14,683.50. 


The US markets ended lower on Tuesday as traders expressed some uncertainty about the near-term outlook for the markets following recent strength. The Dow and the S&P 500 both ended Monday's trading at record closing highs, while the tech-heavy Nasdaq extended last week's rally to reach its best closing level in well over a month. A quiet day on the US economic front also kept traders on the sidelines ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting on Wednesday. Reports on weekly jobless claims, the US trade deficit and producer price inflation may also attract attention in the coming days along with remarks by Fed Chair Jerome Powell. Meanwhile, traders largely shrugged off report the International Monetary Fund raised its global growth projections for this year and next, citing huge fiscal stimulus in some big economies and a vaccine-driven recovery in the future. The world economy is set to grow 6.0 percent this year and 4.4 percent next year, the global lender said in its latest World Economic Outlook (WEO) report.


Crude oil futures ended higher on Tuesday as concerns about energy demand eased a bit after data showed a smart acceleration in China's service sector activity. Survey results from IHS Markit showed the Caixin Purchasing Managers' Index rose to 54.3 in March from 51.5 in February. The pace of expansion was the fastest in last three months. The score has remained above the neutral 50.0 level for eleventh consecutive month. The survey showed that new orders increased at the fastest pace in three months despite a slight fall in export business. Further, a weak dollar contributed as well to oil's uptick. However, worries about rising coronavirus cases and extension of lockdown measures in several parts of Europe limited oil's rise. Crude oil futures for May rose $0.68 or 1.2 percent to settle at $59.33 barrel on the New York Mercantile Exchange. June Brent crude gained $0.55 or 0.88 percent to settle at $62.70 a barrel on London's Intercontinental Exchange.


Continuing previous session drubbing, domestic currency concluded substantially weaker against dollar on account of continued dollar demand from importers and banks. Sentiments remained fragile amid concerns that rising Covid-19 cases and subsequent lockdowns in some states may hurt economic recovery and cause foreign outflows. Traders seemed to have overlooked Commerce and Industry Ministry's latest data showing that foreign direct investment (FDI) equity inflows into the country grew by 28 percent to $54.18 billion during April-January 2020-21. FDI inflows stood at $42.34 billion during April-January 2019-20. On the global front, pound slipped on Tuesday as traders continued to bet on a speedy re-opening of the British economy. Finally, the rupee ended 73.42, weaker by 12 paise from its previous close of 73.30 on Monday.


The FIIs as per Tuesday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 4705.29 crore against gross selling of Rs 5365.17 crore. In the debt segment, the gross purchase was of Rs 229.63 crore against gross selling of Rs 1666.33 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.42 crore against gross selling of Rs 9.55 crore.


The US markets ended lower on Tuesday a day after notching all-time highs on signs of rapid economic recovery. Asian markets were trading mostly higher on Wednesday as more growth data was reported, including IMF's revised forecast on global economic recovery. Indian equity benchmarks ended volatile session in green terrain on Tuesday. Today, the start of session is likely to be cautious ahead of the Reserve Bank of India's (RBI) monetary policy outcome later today. Reserve Bank of India (RBI) will present its first bi-monthly policy for 2021-22 on April 7, 2021. The announcements by RBI today will set the direction for monetary policy for the new financial year. Traders will be concerned as India has recorded a massive surge of 115,269 Covid-19 cases in the last 24 hours. With this, India has seen the biggest-ever daily surge, taking the tally to 12,799,746, Worldometer showed. Active cases have crossed the 800,000-mark and now stand at 843,779. India is now the 4th-worst hit country in terms of active cases. India also witnessed a grim record of second-most fatalities due to covid-19 in a single day in 2021, which stood at 631. The death toll from the deadly infection stands at 166,208. Maharashtra reported over 55,000 Covid-19 cases in the last 24 hours in a persistent rise in cases, while Delhi witnessed 5,100 fresh cases. However, some recovery may be expected in latter trade on report that the International Monetary Fund (IMF) has raised its projection for India's economic growth in the current financial year by one percentage point to 12.5 per cent. The forecast, published in the IMF's World Economic Outlook, suggests India would again become the fastest-growing large economy in the world. In fact, India is the only country among major world economies that is projected to grow at a double-digit rate during FY22. China comes closest, with a forecast of 8.4 per cent economic expansion. Meanwhile, Central Board of Direct Taxes (CBDT) chairman PC Mody said that the Centre's tax resolution scheme Vivad Se Vishwas has resolved nearly a third of all direct tax disputes and has netted Rs 54,005 crore in tax revenue, 51% of which are from the central PSUs. Cement stocks will keep buzzing as Icra said domestic cement demand is expected to be highest in the decade, estimated to surpass 340 million tonne in FY2022, driven by sustained rural housing demand and significant pick-up in infrastructure activity. On the supply side, the capacity addition is also expected to increase by 22-25 million tonne in FY2022. There will be some buzz in Aviation stocks as ratings agency Icra said that India's domestic passenger traffic slipped to a 10-year low at an estimated 53.4 million in the just-concluded financial year. However, in the previous fiscal there were no passenger flight operations for almost two months due to the pandemic-induced lockdown.


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  •  Maruti Suzuki India has reported 86.33% rise in its total production at 1,72,433 units in March 2021 as compared to 92,540 units produced in the same month of last year.
  •  Tata Motors' wholly owned subsidiary -- Jaguar Land Rover (JLR) has commenced bookings for the updated version of F-PACE SUV.
  •  NTPC has added 660 MW Unit-2 of Tanda Super Thermal Power Station in Uttar Pradesh to its installed capacity.
  •  Reliance Industries' telecom arm has entered into agreement with Bharti Airtel for acquisition of right to use spectrum in the 800MHz band in Andhra Pradesh, Delhi and Mumbai circles.
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