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NSE Intra-day chart (09 April 2021)
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Market Commentary 12 April 2021
Markets to make gap-down opening amid weak Asian cues; CPI, IIP data eyed


In a volatile session, Indian equity benchmarks snapped their three-day winning streak and ended with losses on Friday as the increase in new Covid-19 cases to unprecedented levels, raising the prospects of wider lockdown restrictions in the country, continued to batter investors' sentiment. The benchmarks opened lower amid largely negative cues from global markets. Some concern also came with ICRA Ratings' report that an unabated increase in the COVID cases is likely to bring about fears of harsher lockdowns, which could impact the asset quality of retail loans especially for unsecured loans such as in the microfinance sector. It said this, in turn, would impact the fund-raising ability of the NBFCs and HFCs through securitisation of their assets. However, markets managed to trim all losses to trade in positive terrain in morning deals, taking support from Crisil Ratings' report that after eight quarters of either decline or single-digit growth, corporate revenue grew in high double-digits of 15-17 per cent in the March quarter of FY21 to Rs 6.9 lakh crore, partly because of the low base and better realisation due to higher commodity prices, pushing up their operating profits by a much higher 28-30 per cent. But, domestic equity markets once again entered into red terrain in late morning deals with continued selling pressure from metal, power and banking stocks. Traders overlooked Moody's Investors Service's report that high-frequency alternative data indicates a strong rebound in economic activity even as infection rates rise and restrictive measures remain in place across many countries. New infections are spiking again across 13 of the G-20 countries. Nevertheless, the number of fatalities has decreased in recent weeks as vaccinations gather pace. Traders also paid no heed towards Ministry of Finance latest report stating that provisional Direct Tax collections for the Financial Year 2020-21 show growth of almost 5%, as net collections are at Rs 9.45 lakh crore. The net Direct Tax collections include Corporation Tax (CIT) at Rs 4.57 lakh crore and Personal Income Tax (PIT) including Security Transaction Tax (STT) at Rs 4.88 lakh crore. Finally, the BSE Sensex fell 154.89 points or 0.31% to 49,591.32, while the CNX Nifty was down by 38.95 points or 0.26% to 14,834.85.   


The US markets ended higher on Friday with the Dow and the S&P 500 reaching new record closing highs. The strength that emerged on markets reflected continued optimism about a swift recovery by the US economy. Traders were hopeful about the economy fully reopening as the latest data from the Centers for Disease Control shows nearly 20 percent of Americans are fully vaccinated against the coronavirus. Further, repeated assurances the Federal Reserve will maintain its ultra-easy monetary policy for the foreseeable future also generated continued buying interest. On the economic data front, wholesale inventories in the US increased by slightly more than anticipated in the month of February, the Commerce Department revealed in a report. The report said wholesale inventories climbed by 0.6 percent in February after spiking by an upwardly revised 1.4 percent in January. Street had expected wholesale inventories to rise by 0.5 percent compared to the 1.3 percent jump originally reported for the previous month. Meanwhile, producer prices in the US jumped by much more than expected in the month of March, according to a report released by the Labor Department. The Labor Department said its producer price index for final demand surged up by 1.0 percent in March after climbing by 0.5 percent in February. Street had expected another 0.5 percent increase.


Crude oil futures ended lower on Friday as worries about outlook for energy demand amid continued surge in coronavirus cases and lockdown restrictions weighed on oil's prices. Meanwhile, the decision of the Organization of the Petroleum Exporting Countries and allied producers to gradually increase their output by 2 million barrels per day between May and July, raised concerns about possible excess supply in the market if lockdown restrictions remain in place for a longer duration. Besides, in India, refiners are reportedly holding back crude runs as demand slows, with headwinds ahead in the near term, including high fuel prices and localized lockdowns due to rising cases of covid-19 in several states. Crude oil futures for May fell $0.28 or 0.5 percent to settle at $59.32 barrel on the New York Mercantile Exchange. June Brent crude dropped $0.23 or 0.36 percent to settle at $62.97 a barrel on London's Intercontinental Exchange.


Continuing previous session drubbing, Indian rupee tumbled against dollar on Friday, on account of sustained dollar demand from importers and banks. Traders were worried with ICRA Ratings' report that an unabated increase in the COVID cases is likely to bring about fears of harsher lockdowns, which could impact the asset quality of retail loans especially for unsecured loans such as in the microfinance sector. It said this, in turn, would impact the fund-raising ability of the NBFCs and HFCs through securitisation of their assets. Downfall in the Indian equity markets also impacted sentiments. On the global front, dollar recovered slightly on Friday but was still heading for its softest week of the year after surprisingly weak U.S. jobs figures the previous day and ongoing loose Federal Reserve policy prompted investors to trim their bets. Finally, the rupee ended 74.73, weaker by 15 paise from its previous close of 74.58 on Thursday.


The FIIs as per Friday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 10195.16 crore against gross selling of Rs 8111.65 crore, while in the debt segment, the gross purchase was of Rs 570.58 crore with gross sales of Rs 481.66 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.46 crore against gross selling of Rs 19.60 crore.


The US markets ended higher on Friday after solid US inflation data and an uptick in Treasury yields suggested the economic recovery from the pandemic-related recession was gaining momentum. Asian markets are trading mostly in red on Monday as investors wait to see if US earnings can justify sky-high valuations, while bond markets could be tested by what should be very strong readings for US inflation and retail sales this week. Indian markets ended lower on Friday dragged by losses in metals, private banks and auto stocks. Today, the start of holiday shortened week is likely to be gap-down amid weakness in Asian peers. Market participants will be eyeing in the macro-economic data -- consumer price index (CPI) and the Index of Industrial Production (IIP) -- to be out later in the day. Concerns over rising COVID-19 cases in the country and fears of lockdown in certain states may also weigh on market sentiment. Breaking all records, India has recorded a massive surge of 169,899 Covid-19 cases in the last 24 hours. Worldometer showed that with this, India has once again taken its spot as the second-worst hit nation with 13,525,364 cases in total. Maharashtra on Sunday reported over 63,000 new coronavirus cases in its highest ever single-day surge along with 349 deaths. There will be some cautiousness with report that foreign portfolio investors (FPIs) have withdrawn a net Rs 929 crore from Indian markets so far this month amid concerns over rising COVID-19 cases denting the economic recovery. However, some support may come later in the day as Finance Minister Nirmala Sitharaman urged the World Bank Group (WBG) to explore the possibility of sustaining crisis response keeping in mind debt sustainability of vulnerable countries. Traders may take note of report that Fitch Solutions sees RBI keeping benchmark interest rates unchanged during the fiscal to March 2022 following its decision to buy Rs 1 lakh crore of government bonds. Meanwhile, the government may hike foreign direct investment (FDI) limit in the pension sector to 74 percent and a Bill in this regard is expected to come in the next Parliament session. Pharma stocks will be in focus with report that Gilead has signed non-exclusive voluntary licensing agreements with pharma companies including Cipla, Dr Reddy's Laboratories, Jubilant Lifesciences, Syngene, a Biocon company and Zydus Cadila Healthcare to manufacture remdesivir for distribution in 127 countries. There will be some reaction in telecom stocks as the Department of Telecommunications (DoT) is likely to issue guidelines on the implementation of production-linked incentive (PLI) schemes for manufacturers in the sector and start inviting applications for the same in about a week. Auto stocks will be in limelight with Icra's report that the fresh restrictions imposed in Maharashtra to contain the second wave of COVID-19 are likely to impact the festive season auto sales, as Navaratri and Gudi Padwa are falling in April. There will be some important earnings announcements too to keep the markets buzzing.


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  • Coal India's capital expenditure grew more than two-folds to hit an all-time high of Rs 13,115 crore in the just concluded fiscal against the capex of Rs 6,270 crore in FY'20. 
  • ICICI Bank has introduced iDelights Summer Bonanza, a customised bouquet of offers for its customers for the summer of 2021. 
  • Asian Paints has forayed into the world of furnishing.  
  • L&T's Power Transmission & Distribution Business has secured a turnkey EPC Contract from the consortium of ACWA Power and the Water and Electricity Holding Company, for Sudair Solar PV Project of 1.5GW capacity.
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