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NSE Intra-day chart (05 February 2021)
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Market Commentary 08 February 2021
Benchmarks to make optimistic start on strong global cues


Indian equity benchmarks managed to eke out modest gains, ending higher for the fifth straight session. Markets made an optimistic start, as traders took some support with Finance Minister Nirmala Sitharaman exuding confidence that the disinvestment calendar announced in the Union Budget will work well. She added the government is confident that revenue generation will improve through this year and it will be bringing in non-tax revenue other than just disinvestments through various routes, including monetisation of assets. Sentiments remained positive with Economic Affairs Secretary Tarun Bajaj's statement that the government is sticking to the target of becoming a $5 trillion economy by 2024-25 and emphasis on infrastructure sector and other initiatives taken in Budget 2021-22 are aimed at achieving the goal. The spending on infrastructure has gone up from Rs 4.12 lakh crore to Rs 5.54 lakh crore while on the health sector it has risen to Rs 2.23 lakh crore from Rs 94,000 crore in the Budget Estimate for 2020-21. However, indices erased most of their initial gains and traded with volatility, after Reserve Bank of India (RBI) decided to leave benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, implying rate cuts in the future if need arises to support the economy hit by the COVID-19 pandemic. The benchmark repurchase (repo) rate has been left unchanged at 4 per cent, Governor Shaktikanta Das said while announcing the decisions taken by the central bank's Monetary Policy Committee (MPC). But, key gauges managed to end the session in green, as International Monetary Fund (IMF) welcomed India's Union Budget for focussing on growth and said fiscal policy can and should play an important role in facilitating a strong and inclusive economic recovery. IMF's Director of Communications, Gerry Rice has said that the Union Budget rightly focuses on health, education, public infrastructure and, if fully implemented, can help increase India's growth potential. Finally, the BSE Sensex rose 117.34 points or 0.23% to 50,731.63, while the CNX Nifty was up by 28.60 points or 0.19% to 14,924.25.


The US markets ended higher on Friday, extending the upward trend seen over the past several sessions, after the Labor Department report released a closely watched report showing a modest rebound in employment in the month of January. The report said non-farm payroll employment edged up by 49,000 jobs in January after plunging by a revised 227,000 jobs in December. Street had expected employment to rise by about 50,000 jobs following the loss of 140,000 jobs originally reported for the previous month. A report released by the Commerce Department showed the US trade deficit narrowed in the month of December, as the value of exports jumped by more than the value of imports. The Commerce Department said the trade deficit narrowed to $66.6 billion in December from a revised $69.0 billion in November. Street had expected the trade deficit to shrink to $65.7 billion from the $68.1 billion originally reported for the previous month. The narrower deficit came as the value of exports surged up by 3.4 percent to $190.0 billion, while the value of imports increased by 1.5 percent to $256.6 billion. The spike in the value of exports reflected significant increases in exports of crude oil, soybeans, capital goods and automotive vehicles and parts.


Crude oil futures ended higher on Friday on hopes energy demand will increase thanks the vaccination drive picking up momentum, and on output cuts by the oil cartel. With the Organization of the Petroleum Exporting Countries and allies agreeing to cut crude output this month and the next, and Saudi Arabia deciding to unilaterally cut production by 1 million barrels per day, oversupply concerns have faded a bit. Oil prices continued to be supported by recent data from the Energy Information Administration (EIA) that showed US crude inventories dropped by 994,000 barrels last week to 475.7 million barrels, their lowest since March. Crude oil futures for March rose $0.62 or 1.1 percent to settle at $56.85 barrel on the New York Mercantile Exchange. April Brent crude gained 0.85 to settle at $59.34 a barrel on London's Intercontinental Exchange.


Indian rupee ended higher against dollar on Friday, on selling of the American currency by exporters. Local currency took support as Reserve Bank of India (RBI) has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent. Consequently, the reverse repo rate under the LAF remains unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent. Also, RBI's projection of a GDP growth rate of 10.5 per cent for the financial year beginning April 1, on the back of recovery in economic activities. On the global front, pound edged higher against the dollar and the euro on Friday after the Bank of England avoided sub-zero rates for now, putting the pound on track for its fourth week of gains versus the dollar. Finally, the rupee ended at 72.93, 3 paise stronger from its previous close of 72.96 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 13634.23 crore against gross selling of Rs 9836.47 crore, while in the debt segment, the gross purchase was of Rs 1174.71 crore with gross sales of Rs 775.23 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.42 crore against gross selling of Rs 26.40 crore.


The US markets ended higher on Friday, wrapping up a strong week on Wall Street as investors hoped a disappointing January jobs report would increase the likelihood of further stimulus. Asian markets are trading mostly in green on Monday on hopes a $1.9 trillion COVID-19 aid package will be passed by US lawmakers as soon as this month just as coronavirus vaccines are being rolled out globally. Indian markets extended their winning run to the fifth session and ended higher on Friday after the Reserve Bank kept interest rates unchanged but continued its accommodative stance to revive growth. Today, the start of new week is likely to be optimistic tracking strong global cues. Traders will be taking encouragement with Expenditure Secretary T V Somanathan's statement that the government is confident of lowering the fiscal deficit to 4.5 per cent of GDP by 2025-26 fiscal, considering a nominal GDP growth of 10 per cent every year. Some support will come as principal economic advisor Sanjeev Sanyal said to boost the pandemic-hit economy, the government of India is committed to higher capital expenditure not just in the coming fiscal year but over the next three years. He added that a sharp hike in capex in the recently announced Union Budget reflects the government's economic strategy of rebuilding battered demand while ensuring that the supply side is expanded enough to move in tandem. Traders may take note of report that foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 12,266 crore in the Indian market in the first five trading sessions of February, as positive sentiment post-Union Budget 2021 sparked a rally in investment. However, there may be some cautiousness with report that India reported 11,673 fresh Covid-19 cases on Friday pushing the overall tally to 10,838,843, according to Worldometer. The death toll from the deadly infection jumped to 155,114. Meanwhile, Economic Affairs Secretary Tarun Bajaj said the government will borrow about Rs 12 lakh crore for the next fiscal year at a reasonable rate and expressed hope that the yield would be around the current year's level. Market participants will be eyeing the industrial production data for December and CPI inflation for January that are slated to be out on Friday, February 12. There will be some buzz in pharma stocks with report that India's exports of pharmaceutical products during April-December 2020-21 grew by 12.43 per cent to $17.57 billion. Minister of State for Commerce and Industry Hardeep Singh Puri said India's exports of pharmaceutical products have not declined and they are growing consistently. Banking stocks will be in focus with Moody's Investors Service's report that the government's support measures for bank borrowers have softened growth in non-performing loans, averting the risk of a sharp asset quality deterioration. There will be some reaction in steel industry stocks with ICRA's report that the reduction of duty on steel products, as proposed in the Budget 2021-22, may bring down prices of the metal by up to 10 per cent in the near term.


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  • HCL Technologies is planning to add 1,000 employees in the next few months to work out of its campus near Nagpur. 
  • Coal India has signed a MoU with EESL for reducing its carbon footprint and improving the overall operational efficiency and profitability.
  • Bharti Airtel is keen on a full footprint of sub-GHz radiowaves across the country to boost coverage indoors and in rural areas. 
  • ICICI Bank has signed a MoU with MUFG Bank, Japan's premier bank, for collaboration towards catering to the banking requirements of Japanese corporates present in India.
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