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NSE Intra-day chart (15 December 2020)
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Market Commentary 16 December 2020
Benchmarks likely to make optimistic start on firm global cues


After remaining in the negative territory for most part of the session, Indian equity benchmarks managed to settle flat with a positive bias on Tuesday, led by gains in heavyweights Bajaj Finance, Bajaj Finserv, HDFC and Tech Mahindra. The benchmarks opened lower as sentiments remained down-beat with industry body CII stating that the current agitation by farmers has led to supply chain disruptions, which will impact the economy in the coming days and may impinge upon the ongoing recovery from the economic contraction due to COVID-19. Trades overlooked the government data showing that retail Inflation has eased marginally to 6.93% in November due to considerable easing in vegetable prices. Retail inflation had remained above 7 per cent for two month in a row. Market participants also paid no heed towards rating agency CRISIL's report in which it has projected a slower contraction of 7.7% for the Indian economy in the ongoing fiscal, compared to the 9% forecast in September on the back of faster-than-expected recovery in the second quarter, but called for more fiscal measures to sustain it. However, late buying helped benchmarks erase all intraday losses. Traders found some solace with Commerce and Industry Minister Piyush Goyal's statement that foreign direct investments (FDIs) into India have been continuously growing as the country has one of the most facilitative policies to attract overseas investors. He said that during April-September 2020, FDI increased 13 per cent to about $40 billion. Some support also came after the Finance Ministry highlighted the economic reforms for growth and development of the country. It said that from January 2021, taxpayers up to the turnover of Rs 5 crore will have the option of filing a quarterly Goods and Service Tax Returns (GSTR) under QRMP Scheme i.e. Quarterly Returns Monthly Payment Scheme. Finally, the BSE Sensex rose 9.71 points or 0.02% to 46,263.17, while the CNX Nifty was up by 9.70 points or 0.07% to 13,567.85.


The US markets ended higher on Tuesday amid unrelenting optimism lawmakers will eventually agree on a new fiscal stimulus bill. Sentiments got boost following reports that House Speaker Nancy Pelosi has scheduled a meeting with other congressional leaders to discuss a relief package. Pelosi is due to meet with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer and House Minority Leader Kevin McCarthy, while Treasury Secretary Steven Mnuchin will participate by phone. Pelosi's Deputy Chief of Staff Drew Hammill noted on Monday the Speaker and the Treasury Secretary spoke by phone and discussed the urgency of the committees finishing their work as soon as possible. On the economic data front, partly reflecting a continued increase in manufacturing output, the Federal Reserve released a report showing US industrial production rose by slightly more than expected in the month of November. The report said industrial production climbed by 0.4 percent in November following a downwardly revised 0.9 percent advance in October. Street had expected industrial production to rise by 0.3 percent compared to the 1.1 percent jump originally reported for the previous month. The Fed said manufacturing output increased for the seventh straight month, advancing by 0.8 percent in November amid a 5.3 percent spike in motor vehicles and parts production.


Crude oil futures ended higher on Tuesday, extending their previous session's gains, amid easing concerns about the outlook for energy demand following the rollout of a coronavirus vaccine. Fairly buoyant economic data from China also helped ease worries about energy demand. However, worries about surging coronavirus cases in several countries, tighter lockdown restrictions in many places and a report from the International Energy Agency that forecasts a slower than expected recovery in global energy demand limited oil's advance. Crude oil futures for January gained $0.63 or 1.3 percent to settle at $47.62 a barrel on the New York Mercantile Exchange. February Brent crude rose $0.44 or 0.88 percent to settle at $50.73 a barrel on London's Intercontinental Exchange.


Reversing previous session gains, Indian rupee ended lower against dollar on Tuesday, on increased demand for the greenback from importers and banks. Sentiments remained down-beat with industry body CII stating that the current agitation by farmers has led to supply chain disruptions, which will impact the economy in the coming days and may impinge upon the ongoing recovery from the economic contraction due to COVID-19. Traders failed to get any sense of relief as retail inflation based on the Consumer Price Index (CPI) eased to 6.93 per cent in November on the back of softer food prices, though it remained above the comfort level of the Reserve Bank of India (RBI). On the global front, pound stabilised on Tuesday after Monday's sharp rebound as market participants grew more optimistic about the chances of a Brexit deal, but implied volatility gauges pointed to further price swings ahead as the December 31 Brexit deadline approaches. Finally, the rupee ended at 73.63, 8 paise weaker from its previous close of 73.55 on Monday.


The FIIs as per Tuesday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 8751.31 crore against gross selling of Rs 5274.04 crore, while in the debt segment, the gross purchase was of Rs 2393.53 crore with gross sales of Rs 711.25 crore. Besides, in the hybrid segment, the gross buying was of Rs 11.39 crore against gross selling of Rs 8.92 crore.


The US markets ended higher on Tuesday as optimism grew over the prospect of more stimulus. Asian markets are trading in green on Wednesday as hopes of effective coronavirus vaccines and the growing prospect of more US fiscal stimulus cheered investors ahead of the Christmas holiday season. Indian markets trimmed losses and ended flat on Tuesday led by gains in heavyweights like Bajaj and HDFC twins. Today, the markets are likely to make optimistic start following firm global cues. Traders will be taking encouragement as S&P Global Ratings raised India's growth projection for the current fiscal to (-) 7.7 percent from (-) 9 percent estimated earlier on rising demand and falling COVID infection rates. It said rising demand and falling infection rates have tempered its expectation of COVID's hit on the Indian economy. Some support will come as Finance minister Nirmala Sitharaman asserted that the Budget for FY22 will be vibrant enough to sustain economic revival in the aftermath of Covid-19 disruption. However, traders may be concerned with the government data showing that the country's exports dipped 8.74 per cent to $23.52 billion in November on account of contraction in shipments of key sectors like petroleum, engineering, chemicals and gems and jewellery. Besides, trade deficit during the month narrowed to $9.87 billion as imports too declined by 13.32 per cent to $33.39 billion. There may be some cautiousness as India reported 26,401 fresh Covid-19 cases. With this, its case tally now stands at 9,932,908. The country's death toll has mounted to 144,130. With 1,886,807 cases, Maharashtra has the highest number of coronavirus cases, followed by Karnataka 903,425, Andhra Pradesh 876,000, Tamil Nadu 801,161, and Kerala 677,000. Meanwhile, the government has extended the deadline till March 31, 2021 for completing GST anti-profiteering investigations, which were to be completed by November this year. Besides, sugar stocks may be in focus as the Union Cabinet may consider a proposal to provide export subsidy worth Rs 3,600 crore to sugar mills for the marketing year 2020-21 in today's meeting. Auto stocks will be in focus as parliamentary panel on industry recommends a 10% GST reduction for the auto sector to boost demand. The panel has expressed concern about the slowdown in the auto sector that has led to a loss of 3.45 lakh jobs and a loss of 2300 crore per day during the COVID-19 lockdown. There will be some reaction in Chemical industry stocks with Chemicals and Fertilisers Minister D V Sadananda Gowda's statement that the demand for chemicals and petrochemicals is expected to rise 9 per cent annually, and the size of the industry is likely to grow to $300 billion by 2025.


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



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  • TCS has expanded its strategic partnership with Star Alliance to provide predictive and real-time business analytics, improve its customers' overall experience and accelerate its digital transformation journey. 
  • Bajaj Finserv, through its lending and investment arm Bajaj Finance, is offering customers pre-approved personal loans, which can be obtained in just 3 steps. 
  • Tech Mahindra has extended its partnership with SAP SE to deliver intelligent enterprise for customers globally. 
  • Tata Motors' wholly owned subsidiary -- JLR has commenced bookings for plug-in hybrid version of the new Defender with deliveries expected to start in the first quarter of next fiscal.
News Analysis