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NSE Intra-day chart (22 January 2021)
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Market Commentary 25 January 2021
Markets to make positive start on Monday


Friday turned out to be a disappointing day of trade for Indian equity benchmarks with frontline gauged ending with a cut of one and a half percent, breaching their crucial 48,900 (Sensex) and 14,400 (Nifty) levels. Markets started the session on cautious note on report that India recorded 13,701 fresh cases of the coronavirus disease (Covid-19). The total number of active cases in the country has fallen to 10,625,420, while the caseload tally stands at 10,625,420. Globally, more than 98 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. Traders shrugged off report that the Reserve Bank of India (RBI), in its latest assessment of the economy, indicated that the Indian economy has further recovered and estimates the Gross Domestic Product (GDP) to turn positive in the third quarter. Selling intensified in second half of the trade as traders opted to book profit mainly in Reliance Industries (RIL), Housing Development Finance Corporation (HDFC) and HDFC Bank. Sentiments remain dampened after credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the major focus of the government to revive the COVID-19 battered economy has till now been on the supply side, but it is high time to change gears and focus on the demand side as well, lest the ongoing recovery begins to lose steam. Traders took note of report that India's hiring activities declined last year due to the coronavirus pandemic, there is a sudden increase in demand with about 53 per cent of companies saying they are planning to increase their headcounts in 2021. The pandemic adversely impacted economies across Asia-Pacific, including India, which had entered 2020 with robust hiring activities, according to professional recruitment services firm Michael Page India's 'Talent Trends 2021 Report'. Meanwhile, Union Health Ministry said the number of healthcare workers who have received COVID-19 vaccine jabs in India till the evening of the sixth day of the nationwide immunisation drive has reached 9,99,065 as per provisional reports. Finally, the BSE Sensex fell 746.22 points or 1.50% to 48,878.54, while the CNX Nifty was down by 218.45 points or 1.50% to 14,371.90.


The US markets ended mostly lower on Friday on account of profit taking, as some traders looked to cash in on the recent run to new record highs. Selling pressure waned over the course of the session, however, as traders shrugged off uncertainty about President Joe Biden's proposed $1.9 trillion coronavirus relief package. Optimism about more stimulus has helped propel stocks higher recently, although traders seemed unfazed by moderate Republican Senators Mitt Romney and Lisa Murkowski both expressing skepticism about the proposal. Romney and Murkowski both pointed to the recently approved $900 billion stimulus and raised questions about whether more relief is needed. Democrats could attempt to pass a new stimulus bill without Republican support by the so-called reconciliation process, which only requires a majority. However, Democratic Senator Joe Manchin has also expressed concerns about the cost of increasing the size of direct payments to individuals to $2,000 from $600. The negative sentiment may have been partly offset by a report from the National Association of Realtors showing an unexpected rebound in existing home sales in the month of December. NAR said existing home sales climbed by 0.7 percent to an annual rate of 6.76 million in December after tumbling by 2.2 percent to a revised rate of 6.71 million in November. The rebound surprised market participants, who had expected existing home sales to slump by 2.1 percent to a rate of 6.55 million from the 6.69 million originally reported for the previous month. With the unexpected monthly increase, existing home sales in December were up by 22.2 percent compared to the same month a year ago.


Crude oil futures ended lower on Friday after U.S. government data revealed an unexpected weekly rise in domestic crude supplies. The Energy Information Administration reported Friday that U.S. crude inventories rose by 4.4 million barrels for the week ended January 15. However, the EIA data also showed crude stocks at the Cushing, Okla., storage hub declined by 4.7 million barrels for the week. A resurgence of COVID-19 infections in China and Southeast Asia also raised concerns about near-term oil demand. COVID-19 cases have reappeared in China with 103 new infections, marking an 11th day with more than 100 confirmed infections and forcing a lockdown for the first time in months. Meanwhile, Hong Kong on Friday announced its first lockdown, a move reminiscent of the measures used to combat the outbreak of SARS 20 years ago. Crude oil futures for March fell 86 cents or 1.6 percent to settle at $52.27 barrel on the New York Mercantile Exchange. March Brent crude lost 69 cents or 1.2 percent to settle at $55.41 a barrel on London's Intercontinental Exchange.


Indian rupee ended marginally higher against dollar on Friday, on selling of the American currency by exporters. Losses in Indian equity markets also restricted the upside of rupee. Traders took note of report that Reserve Bank of India (RBI) continued to remain a net buyer of the US currency in November after it bought $10.261 billion from the spot market. During the reporting month, the central bank purchased $14.289 billion and sold $4.028 billion, according to the monthly bulletin released by the RBI for January. On the global front, after three straight days of losses, the dollar stabilised on Friday and riskier currencies lost out as the recent equity market rally paused for breath, with business activity data in focus. The dollar had fallen against a basket of currencies for the past three sessions as market optimism about U.S. President Joe Biden's fiscal stimulus plans prompted traders to seek riskier assets, with the New Zealand and Australian dollar gaining. Finally, the rupee ended at 72.97, 2 paise stronger from its previous close of 72.99 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 9093.59 crore against gross selling of Rs 7354.80 crore, while in the debt segment, the gross purchase was of Rs 2607.85 crore with gross sales of Rs 434.78 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.50 crore against gross selling of Rs 7.12 crore.


The US markets ended lower on Friday. Asian markets are trading mixed on Monday as rising COVID-19 cases and doubts over the ability of vaccine makers to supply the promised doses on time soured risk appetite. Indian markets ended 1.5 percent lower on Friday mainly dragged by banking, financial and metal sectors. Today, the markets are likely to make positive start. Markets may continue to remain volatile during the week amid monthly derivatives expiry, quarterly earnings and the upcoming Union Budget. Traders will be taking encouragement with a private report that India's economy showed signs a recovery is taking root as waning virus cases and a vaccine roll-out supported sentiment and as focus turns to further stimulus possible in the upcoming federal budget. Some support will come with report that foreign portfolio investors (FPI) remained net buyers to the tune of Rs 18,456 crore so far in January as global liquidity led to continued investment in emerging markets. Besides, after touching a record high in the preceding week, RBI data showed that the country's foreign exchange reserves declined by $1.839 billion to $584.242 billion in the week ended January 15. In the previous week ended January 8, the reserves had climbed by $758 million to touch a lifetime high of $586.082 billion. Traders may take note of report that India recorded 12,921 fresh cases of the coronavirus disease (Covid-19). The total number of active cases in the country has fallen to 186,115, while the caseload tally stands at 10,668,356. Globally, more than 99.7 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. NBFCs stocks will be in focus as the RBI proposed a structure to categorise NBFCs, or shadow banks, depending on their size and interconnectedness with the system. Continuing the recent flurry of initial public offerings, today the Rs 412 crore IPO of Stove Kraft Ltd will open for subscription. The kitchen appliance manufacturer is one of the leading brands in the segment. The issue is priced at Rs 384-385 per unit and investors can bid for a lot of 38 equity shares and in multiples thereafter. Meanwhile, Big farmers' rally today in Mumbai to protest against the Centre's new agriculture laws. Maharashtra farmers join to support the ongoing farmers' protest in Delhi. The farmers are protesting to demand repealing of three agri laws, central law guaranteeing MSP & procurement. Mumbai Police has beefed up the security at Azad Maidan.



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



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  • SEBI has imposed a penalty of Rs 1 crore on HDFC Bank for invocation of client securities pledged by stock broking firm BRH Wealth Kreators in violation of an interim order by the regulator. 
  • Kotak Mahindra Bank has introduced instant in-principle sanction of home loans on its digital platform - Kotak Digi Home Loans. 
  • ICICI Bank has executed its first interbank - money market transaction linked with Secured Overnight Funding Rate. 
  • NTPC has decided to issue unsecured non-convertible bonds in the nature of debentures of Rs 2,500 crore on January 27, 2021, through private placement.
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