Comments on the Market by Mr. Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities

Synopsis:

Indian benchmark indices tumbled today ahead of Sept. contract expiry and RBI policy on 30^th Sept. US Air strikes on ISIS in Syria also remained in focus. Chinese preliminary PMI manufacturing of 50.5 for Sept. helped Nifty to sustains gains and maintain 8100 levels but European PMI which came in at 52.3 in Sept triggered profit booking . Major European indices lost more than a percent and Nifty broke 8100 with Cipla, DLF and TATA companies leading the fall. Advance decline ratio was at 6:44 on Nifty.  Nifty closed at 8017.55 and Sensex closed below 27000 at 26775.69.

Indian Markets

Indian benchmark indices tumbled today ahead of Sept. contract expiry and RBI policy on 30th Sept. US Air strikes on ISIS in Syria also remained in focus. Chinese preliminary PMI manufacturing of 50.5 for Sept. helped Nifty to sustains gains and maintain 8100 levels but European PMI which came in at 52.3 in Sept triggered profit booking . Major European indices lost more than a percent and Nifty broke 8100 with Cipla, DLF and TATA companies leading the fall. Advance decline ratio was at 6:44 on Nifty. Nifty closed at 8017.55 and Sensex closed below 27000 at 26775.69.

Rupee remained under pressure today as weakness was seen in equity markets and ahead of RBI policy on 30th Sept. USDINR pair resisted 60.95. Slight pause in Dollar rally and weakness in USD index helped Rupee to show slight strength and face resistance at 60.86. Higher demand for USD from importers maintained weakness in Rupee. Major European currencies were strong against Dollar while Asian currencies also showed strength against USD. RBI policy will be a key event to watch out for in coming week.

Other Asian Markets

Asian indices closed mixed today, Nikkei was closed on account of Autumnal Equinox holiday. China’s preliminary PMI manufacturing reading of 50.5 for Sept. showed some improvement that supported the markets as hopes of Chinese stimulus faded. SSE closed up by 0.87% while HSI closed down by 0.49%.

Commodity Outlook:

Commodity Market showed lot of volatility in the morning session. Gold and Silver remained weak in the first few hours but made gains later due to reports of Syria Air Strikes. Crude Oil prices remained weak despite upbeat Chinese PMI data as Global supply concerns weighed on its prices. Natural Gas looked strong in the morning session as temperature forecasts in USA are starting to heat up. Base Metal Prices also looked dull despite upbeat PMI from China due to supply concerns. Nickel Price hits its 5 month low due to weak fundamentals and cautious Investors.

Evening outlook:

Gold and Silver Prices could show strength due to geopolitical tensions; Crude Oil and Natural Gas are also expected to make gains while Base metals are expected to trade cautiously.

Stock Recommendations:

Hindalco– Sell at Rs157.15(CMP); Target - Rs 155.50; Stop Loss – Rs 158.50

IDFC – Sell at Rs 142.50(CMP); Target - Rs 141.00; Stop Loss – Rs 144.00

Axis Bank– Buy at Rs 399.10(CMP); Target - Rs 406.00; Stop Loss – Rs 395.00

Sectors Snapshot

Bank Nifty: Bank Nifty opened lower but gained on back of Chinese data but witnessed sharp profit booking as Euro zone PMI flash disappointed markets. Cautious mood was seen ahead of RBI policy. Canara Bank (-4.29%) was top loser on index.

CNX Energy: Energy stocks also lost in a weak market with OMCs witnessing selloff. Power stocks lost more than 2% while ONGC (-2.82%) and Reliance (-2.59%) also dragged the index. Only NTPC (+0.33%) closed in green on CNX Energy.

CNX Pharma: Defensives also witnessed outflows with major profit booking on Cipla (-4.67%). Major stocks Cipla, Sun Pharma (-2.22%) and Ranbaxy (-3.47%) dragged CNX Pharma. CNX Pharma lost 218.50 points.

CNX Media: Media index lost -1.86% with Eros International losing -6.36% and leading the fall. Most stocks showed negative momentum on the index. India VIX: India VIX closed up by 7.31% in weak market

Market Movers

Gainers

HCL: Shares of the company were seen up on account of choppy trade in Nifty and investors were moving towards defensive sector. The Shares were up by 1.48% to close at 1724.45. The company also informed the Exchange that Employees Stock Option Allotment Committee of the Company has on September 22, 2014 allotted 1, 68, 460 Equity Shares of Rs.2/- each.

Losers

DLF: The share prices were seen falling consecutively from past three days. It slumped after BNP paribus downgraded the stock to "reduce" from "hold". The report highlighted DLF's weak operational data and negative news flow from ongoing legal cases for the downgrade.

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