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

Nifty nears 8400 but fails to register strong gains, profit taking drags

“Indian equity markets showed positive momentum in initial hours of the trade. Nifty opened higher to touch new life time high but gave up most of the gains in last hour of the trade in a choppy session. Mid cap and small cap indices also gained during the session. The sentiment was lifted by positive comments by the finance minister, low oil prices and hopes of a rate cut by RBI in forthcoming credit policy in December. Banking and IT stocks lifted Nifty while power and metal stocks dragged the benchmark. On the global front, China’s Oct HSBC services PMI came at 52.9 against 53.5 in Sept. Also, credit policies of Bank of England and ECB remained in focus as major European indices registered gains” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian equity markets showed positive momentum in initial hours of the trade. Nifty opened higher to touch new life time high but gave up most of the gains in last hour of the trade in a choppy session. Mid cap and small cap indices also gained during the session. The sentiment was lifted by positive comments by the finance minister, low oil prices and hopes of a rate cut by RBI in forthcoming credit policy in December. Banking and IT stocks lifted Nifty while power and metal stocks dragged the benchmark. On the global front, China’s Oct HSBC services PMI came at 52.9 against 53.5 in Sept. Also, credit policies of Bank of England and ECB remained in focus as major European indices registered gains.

USDINR opened flat today and showed weakness in initial hours of the trade gaining momentum from inflows in equity markets but showed strength mounting pressure on Rupee and traded near 61.40 mark in a narrow range of 9 paisa.  Asian currencies were mostly weak against the greenback while USD index was trading up suggesting strength in USD against major world currencies. Recent end of QE3 and stimulus announcement of Bank of Japan provided strength to USD capping gains on Rupee amid upcoming RBI credit policy in December.

Other Asian Markets

Nikkei bucked the negative trend in Asian markets and registered gains closing at 7 year high. SSE closed down by 0.47% after gaining in previous session and as China’s HSBC Services PMI for October fell to 52.9, profit taking was seen during the session. HSI also closed down by 0.63%. The session remained mostly with negative bias in Asian equity markets.

Commodity Outlook:

Commodity Market remained weak in morning session. Gold and silver Prices continue to linger at their 4 year lows on strong dollar and record breaking Equity Markets. Crude Oil continued its fall below multi year lows as Saudi cut prices for supply of oil while natural gas continued its bull run on chilly weather forecasts in US. Base metals stayed weak in the morning session due to supply concerns. Strong dollar continued weaken copper prices.

Evening outlook:

Gold and Silver Prices are expected to dip further in the Evening session; Crude Oil Prices are expected to remain weak while Natural Gas prices are expected to be strong; Base Metals are expected to be steady in the Evening session.

Stock Recommendations:

IOCL – Buy at Rs.369.30(CMP); Target - Rs.373.00; Stop Loss – Rs.366.00

Orient Cements – Buy at Rs.148.55(CMP); Target - Rs.151.00; Stop Loss – Rs.146.50

ONGC – Sell at Rs. 403.60(CMP); Target - Rs.399.00; Stop Loss – Rs.407.00

Sectors Snapshot

Bank Nifty: Bank nifty continued to rally after opening higher. Japan stimulus, positive FM comments and rate cut hopes from RBI kept sentiment positive in banking sector. Private Banks outperformed Public banks with exception of Yes bank which closed down by 1.25%.

CNX Energy: Energy index fell gradually during the session as profit booking kicked in. OMC stocks were only gainers on back of falling crude prices.  Cairn India (-4.97%) was top loser on the index.

CNX Pharma: Pharma index touched all time high with major stocks supporting the index.  Among majors, Cipla was only loser. Glen Pharma (+5.18%) was top gainer on the index.

CNX Media: Media index opened higher but came of day’s high and closed in positive.  KSS Ltd. (+20%) was top gainer on the index. Breadth remained largely positive on the index with majors supporting the positive momentum.

India VIX:  VIX lost 0.53% as markets showed strength

Market Movers

Axis Bank: Shares of the company were seen up by 2.85% to close at 445.25 after Bank Nifty touching new highs as positive sentiments shown by the investors. Company also informed the Exchange regarding the allotment of securities under its ESOP scheme. Shares of the company were the best performer among Nifty constituents

Losers

Cairn India: Shares of the company were seen down by 4.97% to close at 276.35 as the fall in oil prices kept it under pressure. Continued fall in crude and oil prices could lead to lower revenue and hence weakness was seen. It was the worst performer among the Nifty constituents.

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