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NSE Intra-day chart (24 February 2021)
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Market Commentary 25 February 2021
Benchmarks likely to make gap-up opening amid rally in global markets


Indian equity benchmarks ended significantly higher on Wednesday after trading hours were extended following a technical glitch at NSE. Markets made optimistic start, as traders took encouragement with a private report that India's GDP may turn positive at 1.3 percent in the third quarter of 2020-21, having witnessed contraction in the previous two quarters due to the coronavirus pandemic, as the number of cases is falling and public spending has started rising. Some support also came in as Agriculture Minister Narendra Singh Tomar said that the government's decision to increase the agriculture credit target to Rs 16.5 lakh crore for the next fiscal will help in easing the liquidity crunch of farmers.  However, trading has been halted on NSE due to a technical glitch as the live price quotes of spot Nifty and Bank Nifty indexes have stopped updating. Post resumption of trade, benchmark indices shot up specularly in an unprecedented extended session, as private banks edged higher after Centre lifted the embargo on grant of government business to private banks, enabling banks to participate in all developmental activities. Finance Minister Nirmala Sitharaman said that Private Banks can now be equal partners in development of the Indian economy, furthering the government's social sector initiatives and enhancing customer convenience. Traders also took some support with Union Minister Sadananda Gowda's statement that the chemicals and petrochemicals sector has huge potential and can contribute significantly towards achieving the government's target of $5 trillion economy. He also said India has potential to become a global petrochemical hub & factors like high GDP growth, presence of skilled manpower, big domestic market makes India an attractive platform for investment in the sector. Traders took a note of Niti Aayog CEO Amitabh Kant's statement that India now needs to get into cutting edge technology in order to boost its exports which will benefit sectors such as telecom, automobiles, battery storage devices, and solar energy, among others. Finally, the BSE Sensex rose 1030.28 points or 2.07% to 50,781.69, while the CNX Nifty was up by 274.20 points or 1.86% to 14,982.00.


The US markets ended higher on Wednesday as bond yields gave back ground after moving significantly higher early in the session. The yields on ten-year notes and thirty-year bonds reached their highest intraday levels in a year before pulling back as the day progressed. The pullback by yields followed Federal Reserve Chair Jerome Powell once again reiterating that the Fed is likely to maintain its ultra-easy monetary policy for the foreseeable future. Powell testified before House Financial Services Committee, with his prepared remarks mirroring those he delivered before the Senate Banking Committee on Tuesday. The Fed chief also continued to downplay the risks of inflation, which have recently spooked investors and driven treasury yields to their highest levels since the early days of the coronavirus pandemic. Besides, news FDA staff have endorsed Johnson & Johnson's (JNJ) Covid-19 vaccine for emergency use also have contributed to the strength on markets, with the move paving the way for final approval of the new single-dose vaccine. On the economic data front, data released by the Commerce Department showed a much bigger than expected jump in new home sales in the US in the month of January. The Commerce Department said new home sales spiked by 4.3 percent to an annual rate of 923,000 in January after soaring by 5.5 percent to a revised rate of 885,000 in December. Street had expected new home sales to surge up by 1.5 percent to a rate of 855,000 from the 842,000 originally reported for the previous month.


Crude oil futures ended at 13-month high on Wednesday as concerns over the likely impact of last week's severe cold conditions on refinery activity in Texas outweighed official data showing an unexpected increase in US crude inventories. Data released by US Energy Information Administration (EIA) showed US crude stockpiles increased by 1.3 million barrels in the week ended February 19 compared to expectations for a drop of nearly 5 million barrels. The American Petroleum Institute's report, released on Tuesday, said crude inventories rose by 1.026 million barrels last week versus estimates for a draw of 5.2 million barrels. The oil market also shrugged off a report saying that the Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, will likely consider increasing crude production by 500,000 barrels per day beginning in April. The OPEC+ meeting is scheduled to take place next week. Crude oil futures for April surged $1.55 or 2.5 percent to settle at $63.22 barrel on the New York Mercantile Exchange. April Brent crude rose $1.67 or 2.6 percent to settle at $67.04 a barrel on London's Intercontinental Exchange.


Indian rupee ended higher against dollar on Wednesday as traders mood were upbeat as commerce ministry in its latest report has showed that India's exports to China has increased by 16.15 per cent to $20.87 billion in 2020 from $17.9 billion in the previous year on account of healthy growth in the shipments of ores, iron and steel, aluminum and copper. Adding optimism, private report stated that India's GDP may turn positive at 1.3 percent in the third quarter of 2020-21, having witnessed contraction in the previous two quarters due to the coronavirus pandemic, as the number of cases is falling and public spending has started rising. On the global front, dollar remained at multi-year lows against the Antipodean currencies and held near a one-month low versus the euro as reflation trades gripped the currency markets on Wednesday. Finally, the rupee ended at 72.35, 11 paise stronger from its previous close of 72.46 on Tuesday.


The FIIs as per Wednesday's data were net seller in equity segment and net buyer in debt segment. In equity segment, the gross buying was of Rs 9177.74 crore against gross selling of Rs 9522.95 crore, while in the debt segment, the gross purchase was of Rs 1501.49 crore with gross sales of Rs 1036.53 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.56 crore against gross selling of Rs 48.26 crore.


The US markets ended higher on Wednesday shaking off early weakness after Federal Reserve Chair Jerome Powell's comments calmed inflation worries. Asian markets are trading in green on Thursday after US Federal Reserve Chair Jerome Powell reaffirmed interest rates would stay low, calming market fears that higher inflation might prompt the central bank to tighten the monetary spigot. Indian markets ended 2 percent higher on Wednesday, tracking strong buying in financial stocks with the Nifty Bank surging over 1,400 points, after trading hours were extended till 5:00 PM following a technical glitch at NSE. Today, the markets are likely to make gap-up start following a rally in global markets. There may be some volatility in the markets ahead of the February F&O expiry. Traders will be taking encouragement with a private report that India's economy is likely to have returned to growth in the December quarter due to the easing of restrictions on movement after the first wave of the coronavirus epidemic peaked. Some support will come as the Reserve Bank of India (RBI) announced yet another round of Open Market Operations (OMO) or simultaneous purchase and sale of gilts on March 4. Under this, the RBI will buy Rs 15,000 crore worth bonds in four different papers and sell Rs 150,000 crore worth bonds in two different securities. However, there may be some cautiousness as India's count of active cases once again topped the 150,000 mark. On Wednesday, the country registered 17,106 fresh Covid-19 cases, taking its the caseload tally to 11,046,432. India continues to be second-most-affected globally, and ranks 14th among worst-hit nations by active cases. Banking stocks will be in focus as bank unions under the umbrella body All India Bank Employees' Association (AIBEA) opposed the government's decision to allow all private sector lenders in government-related business, saying it was unfair and to the disadvantage of public sector banks (PSBs). The finance ministry, in a statement, said all private sector banks can now participate in government-related businesses like collection of taxes, pension payments and small savings schemes. There will be some reaction in PSU stocks as Prime Minister Narendra Modi made his strongest pitch for privatisation of non-strategic public sector units (PSUs), saying the government has no business to be in business and sustaining loss-making units on taxpayers' money drains resources that could otherwise have been spent on public welfare schemes. Aviation stocks will be in limelight as global airline industry body IATA warned that the outlook for airlines had weakened since its December forecasts, and due to tightening travel restrictions it now expected the sector to still be bleeding cash by the fourth quarter of this year. There will be some buzz in pharma and IT hardware stocks as extending the Production-Linked Incentive (PLI) scheme to more sectors, the Union Cabinet approved Rs 15,000 crore for incentives to domestic manufacturing of pharmaceuticals and Rs 7,350 crore for production of laptops, tablets, all-in-one personal computers and servers in India. Meanwhile, the 100-crore Nureca initial public offering (IPO), which received nearly 40 times subscription, is set to make its share market debut on Thursday. During February 15-17, 2021. The home healthcare and wellness products seller issue was sold in the price band of Rs 396-400 apiece.


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



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  • Maruti Suzuki India has launched all-new Swift 2021, engineered to further excite the customer with an advanced powertrain, appealing dual tone exterior and new exciting features. 
  • Bharti Airtel has entered the advertising business with the launch of Airtel Ads - a powerful brand engagement solution. 
  • ICICI Bank has entered into partnership with GCC and CSCL to launch Common Payment Card System called Namma Chennai Smart Card. 
  • GAIL India has executed Share Purchase agreements with NTPC on February 23, 2021 for purchase of NTPC's entire shareholding (14.82%) in Konkan LNG.
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