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NSE Intra-day chart (12 January 2021)
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Market Commentary 13 January 2021
Markets to make flat-to-positive start tracking gains in global peers


Extending their record braking rally for third consecutive day, Indian equity benchmarks ended the Tuesday's trade above their crucial 49,500 (Sensex) and 14,550 (Nifty) levels. Markets made a pessimistic start as traders remained concerned after the Reserve Bank of India (RBI) warned that the Indian banking system's bad loans may rise to a two-decade high on the back of COVID-19 induced stress. In its latest Financial Stability Report (FSR), the RBI said Public Sector Banks (PSBs) may see gross NPAs rise from 9.7 percent in September 2020 to 16.2 percent by September 2021. Sentiments also remain dampened as the finance ministry has rejected the demand for further extension of the last date for income tax return (ITR) filing beyond February 15 for the ones where audit is required. In December 2020, the government extended the ITR filing deadline for individuals till January 10 and till February 15 for companies. However, markets gained traction in noon deals and turned positive as ICRA projected that India's GDP will record a double-digit expansion of 10.1 percent in the upcoming fiscal year. It also expects the monetary policy to be changed to neutral from accommodative in the August 2021 Policy review or later. Markets extended gains to end near all-time closing highs after the Ministry of Finance has released the 11th weekly instalment of Rs 6,000 crore to the States. Out of this, an amount of Rs 5,516.60 crore has been released to 23 States and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. Finally, the BSE Sensex rose 247.79 points or 0.50% to 49,517.11, while the CNX Nifty was up by 78.70 points or 0.54% to 14,563.45.


The US markets ended marginally higher on Tuesday as investors were responding to the rollout of COVID-19 vaccines and remedies. Optimism about another big fiscal stimulus also pushed up prices. Intel, General Electric, DuPont, Travelers Companies, Goldman Sachs and Caterpillar gained 2 to 3.5 percent. Home Depot, JP Morgan Chase, Chevron and Walmart also ended notably higher. However, the political tensions in the US, and worries about rising coronavirus cases weighed on stocks. Investors were also looking ahead to quarterly earnings reports. On the political front, articles of impeachment against US President Donald Trump are under way in the House. Trump warned that it was dangerous to the United States for him to be impeached. He also claimed his inflammatory comments at a rally shortly before the outbreak of violence in the halls of Congress, which lead to four deaths, were not harmful. People thought what I said was totally appropriate, Trump said when he was asked what his personal responsibility was for the violence. The riot happened after Trump and his family members urged supporters at a rally to fight with him to reverse Joe Biden's Electoral College win.


Crude oil futures ended higher on Tuesday, lifting the most actively traded oil futures contract to their best close in about 11 months. A weak dollar and Saudi Arabia's decision to cut production in the next two months supported the commodity. Saudi Arabia said last week that it has decided to cut production by 1 million barrels a day in February and March. Crude oil futures for February rose 96 cents or 1.8 percent to settle at $53.21 a barrel on the New York Mercantile Exchange. March Brent crude surged 92 cents or 1.7 percent to settle at $56.58 a barrel on London's Intercontinental Exchange.


Indian rupee ended substantially stronger on fresh selling of American currency by banks and exporters. Besides, healthy growth in the domestic equity market added to the rupee gains. Sentiments were perked up as ICRA Ratings in its latest report states it expects India's real gross domestic product (GDP) to grow by 10.1 per cent in FY2022. However, it said the value of GDP in the next financial year will only mildly surpass the level that had been recorded in FY2020. On the global front, dollar edged higher across the board on Monday, extending a rebound from the near three-year low hit last week, taking strength from the recent spike in Treasury yields and the prospect of a growth boost from higher U.S. fiscal stimulus. Finally, the rupee ended at 73.25, 15 paise stronger from its previous close of 73.40 on Monday.


The FIIs as per Tuesday's data were net buyer in equity segment and net seller in debt segment. In equity segment, the gross buying was of Rs 9423.22 crore against gross selling of Rs 6483.34 crore, while in the debt segment, the gross purchase was of Rs 349.69 crore with gross sales of Rs 1843.31 crore. Besides, in the hybrid segment, the gross buying was of Rs 12.48 crore against gross selling of Rs 15.03 crore.


The US markets ended higher on Tuesday as markets bet on more government stimulus and coronavirus vaccines in 2021. Asian markets are trading mostly in green on Wednesday tracking modest Wall Street gains as prospects of an eventual victory against coronavirus shored up recovery hopes, while tight supply expectations pushed oil prices to their highest in a year. Indian markets recovered from morning lows to end at record close for the third straight session on Tuesday mainly led by a rally in the PSU banks, auto and realty sectors. Today, the domestic markets are likely to make flat-to-positive start tracking gains in global peers coupled with easing inflation data. Traders will be getting encouragement with the government data showing that Consumer Price Index (CPI)-based inflation eased to 4.59 per cent in December 2020 compared to 6.93 per cent in November. Food inflation declined to 3.41 per cent in December, compared to 9.5 per cent in the previous month. Some supprot may also come with report that a mega immunisation drive against Covid-19 has kicked off with nine flights transporting over 5.6 million doses of the vaccine to 13 cities across the country on Tuesday. Kerala will get the first consignment of over 400,000 coronavirus vaccines today. In the last 24 hours, India registered 14,898 fresh Covid-19 cases, taking the tally to 10,494,811. traders may take note of that the government said India's new Foreign Trade Policy, under formulation, will come into effect from April 1, 2021 for five years and will strive to make the country a leader in international trade. However, market participants may be concerned with the Ministry of Statistics and Programme Implementation data showing that the Index of Industrial Production (IIP) contracted by 1.9 per cent in November as against 3.6 per cent growth in October. The manufacturing sector output shrank by 1.7 per cent in November, while power generation grew 3.5 per cent. Mining output saw a decline of 7.3 per cent. There may be some cautiousness with SBI Ecowrap report stating that India's fiscal deficit in the current financial year is likely to reach 7.4 per cent of the GDP on the back of enhanced government expenditure amid the pandemic. Meanwhile, the Union cabinet is most likely to consider the proposal of mining sector reform for enhancing private investment, in the meeting scheduled for January 13. There will be some reaction hospitality industry stocks with ICRA's report that the domestic hospitality industry, which has been severely affected by the COVID -19 related disruptions, is likely to witness a decline of over 65 percent in 2020-21. However, there might be a recovery in demand in the later part of financial year 2021-22 as vaccine rollouts gains traction. There will be some important earnings announcements too to keep the markets buzzing.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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  • Bharti Airtel and National Small Industries Corporation have teamed up to drive the digital transformation of MSMEs in India. 
  • Tata Motors' wholly owned subsidiary -- JLR has reported 9% Y-o-Y fall in retail sales at 128,469 vehicles for the quarter ending December 31, 2020 over the same period last year. 
  • Dr. Reddy's Laboratories has got approval from the independent Data and Safety Monitoring Board for phase 3 trials of Russia's Sputnik V Covid-19 vaccine. 
  • SBI and Mahindra Lifespace have signed a MoU to enable an improved and more seamless experience for homebuyers across India.
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