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NSE Intra-day chart (19 January 2021)
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Market Commentary 20 January 2021
Benchmarks to make cautious start amid mixed Asian cues


Bulls made strong comeback on Dalal Street on Tuesday with frontline gauges settling with a gain of over one and a half percent. The investors' mood remained up-beat throughout the day and there appeared not even an iota of profit booking, as investors continued hunt for fundamentally strong stocks. Markets made a gap up opening as traders got boost with ICRA's report stating that economic activity recorded a broad-based improvement in December as against November, showing a return of demand. ICRA said most of the indicators have displayed a year-on-year (y-o-y) expansion in December 2020, which signals a tentative return to pre-COVID normalcy. Sentiments also got some support with report that India recorded 9,975 fresh cases of the coronavirus disease (Covid-19), the lowest daily rise since June 8, 2020, resulting in the total active cases in the country falling below 205,500. The death toll has increased to 152,593. India's caseload tally stands at 10,582,647. Markets extended gains with traders taking support with report that the Finance Ministry has released the 12th instalment of Rs 6,000 crore to states to meet the GST compensation shortfall, taking the total amount released so far under this window to Rs 72,000 crore. The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of Goods and Services Tax (GST). Traders were also energized as Reserve Bank of India (RBI) is likely to spend at least $20 billion more to support the rupee and increase the forex kitty through the reminder of the financial year, taking its overall forex intervention to $93 billion. Traders also took note of report that India offers tremendous business opportunities to the US in various sectors such as manufacturing and the COVID-19 pandemic has presented a unique opportunity to the country to work with America to build resilient and reliable supply chains that will have the ability to weather future shocks, eminent speakers told a virtual forum ahead of the India Subcontracting Expo. Finally, the BSE Sensex soared 834.02 points or 1.72% to 49,398.29, while the CNX Nifty was up by 239.85 points or 1.68% to 14,521.15.


The US markets ended higher on Tuesday as traders returned to their desks following the long holiday weekend.  The strength on markets came following the losses seen last week, when the Dow slid by 0.9 percent and the Nasdaq and the S&P 500 both slumped by 1.5 percent. The markets also benefited from continued optimism about additional stimulus as well as a faster rollout of coronavirus vaccines under incoming President Joe Biden. Traders kept an eye on remarks from Treasury Secretary nominee Janet Yellen during her confirmation hearing before the Senate Finance Committee. In prepared remarks, Yellen called for additional stimulus to address the impact of the ongoing coronavirus pandemic, arguing the government needs to act big. Yellen acknowledged the mounting national debt facing the incoming administration but claimed the benefits of another relief package will far outweigh the costs. However, a steep drop by shares of Goldman Sachs limited the upside for the Dow, with the financial giant slumping by 2.3 percent despite reporting better than expected fourth quarter results. Bank of America also moved to the downside after reporting better than expected fourth quarter earnings but on revenues that missed estimates. sectoral front, semiconductor stocks moved sharply higher over the course of the session, driving the Philadelphia Semiconductor Index up by 3.4 percent to a new record closing high. Biotechnology stocks also saw significant strength on the day, resulting in a 1.8 percent advance by the NYSE Arca Biotechnology Index. The index reached its best closing level in six months.


Crude oil futures ended higher on Tuesday on dollar's weakness and expectations of more economic stimulus in the US. US Treasury Secretary elect Janet Yellen's comments about the need for a larger stimulus took some shine off the dollar and contributed to oil's uptick, as additional economic relief from the government could push up energy demand. Meanwhile, traders were also betting on hopes energy demand from China will pick up as recent data indicates the recovery in the world's second largest economy is showing signs of gaining momentum. Besides, a report from the Energy Information Administration (IEA) forecasts world oil demand to recover by 5.5 million barrels per day to 96.6 million this year. That reflects a downward revision of 0.3 million barrels from last month's assessment. Crude oil futures for February gained $0.62 or 1.2 percent to settle at $52.98 a barrel on the New York Mercantile Exchange. March Brent crude rose $1.11 or 2.03 percent to settle at $55.86 a barrel on London's Intercontinental Exchange.


Erasing prevision session drubbing, Indian rupee ended higher against dollar on Tuesday owing to dollar sale by exporters and banks. Besides, healthy growth in the domestic equity market and dollar weakness against other currencies overseas added to the rupee gains. Sentiments were upbeat as Reserve Bank of India (RBI) is likely to spend at least $20 billion more to support the rupee and increase the forex kitty through the reminder of the financial year, taking its overall forex intervention to $93 billion. Adding optimism, ICRA's latest report stated that the economic activity recorded a broad-based improvement in December as against November, showing a return of demand. On the global front, dollar dropped on Tuesday as investors prepared for U.S. Treasury Secretary nominee Janet Yellen to talk up the need for major fiscal stimulus and commit to a market-determined exchange rate when she testifies later in the day. Finally, the rupee ended at 73.17, 11 paise stronger from its previous close of 73.28 on Friday.


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 9092.09 crore against gross selling of Rs 7140.58 crore, while in the debt segment, the gross purchase was of Rs 286.80 crore with gross sales of Rs 1581.71 crore. Besides, in the hybrid segment, the gross buying was of Rs 55.16 crore against gross selling of Rs 41.50 crore.


The US markets ended higher on Tuesday on the back of US Treasury Secretary nominee Janet Yellen's push for a sizable fiscal relief package in response to the Covid-19 pandemic. Asian markets are trading mixed on Wednesday as investors assessed comments suggesting a tough line from Joe Biden's incoming administration toward China. Indian markets ended higher on Tuesday, with key benchmark indexes climbing around 2 percent, as optimism about China's economy and hopes for further global stimulus helped spur buying across the board. Today, the markets are likely to make cautious start tracking mixed Asian cues. There will be some cautiousness as India recorded 13,700 fresh cases of the coronavirus disease (Covid-19). The total number of active cases in the country has fallen below 200,000, while the caseload tally stands at 10,596,442. Globally, 96.6 million people have been infected by the virus. The country continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases, according to data from Worldometer. however, some support may come later in the day with a private report that the ongoing key reforms such as sops for manufacturing, easier labour laws, wooing FDI inflows and privatisation will help improve productivity and support long-term growth at 7.5-8 per cent levels, which if played out well, can help India contribute 15 per cent of global GDP growth by FY2026. Also, Investment through participatory notes (P-notes) in the domestic capital market rose to a 31-month high of Rs 87,132 crore at December-end, reflecting the bullish stance of FPIs. Traders may take note of Niti Aayog CEO Amitabh Kan's statement that India must remain an integral part of the global economy if it has to grow at 9-10 per cent over the next three decades. Meanwhile, In the primary market, the three-day initial public offering of Indigo Paints will open for public subscription today. The price band has been fixed at Rs 1,488-1,490 per share for the initial share sale. Angel Broking has recommended 'subscribe' to the issue owing to the company's track record of consistent growth, differentiated products, and leveraged brand equity and distribution network.


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



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  • Tata Motors has entered into partnerships with leading private banks, including HDFC Bank, ICICI Bank and Yes Bank, to fund its commercial vehicles. 
  • Infosys has been accredited with the Google Cloud Partner Specialization in the data and analytics space. 
  • Maruti Suzuki India is increasing the price for select models owing to increase in various input costs. 
  • HDFC Bank is preparing a two-pronged strategy to address the issue of digital outage reported in the recent past.
News Analysis