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

Nifty closes flat, broader market outperform. Infra rises ,metals shine

“Nifty closed flat today as global sentiments remained weak. US FOMC minutes were awaited. Public banks witnessed inflows after SBI posted stable Q2 results last week. Private banks were down on account of profit booking. Broader markets outperformed Nifty as inflows were directed from large caps. IT stocks were weak as USDINR traded with negative bias. Major Asian indices were mixed with Nikkei recovering and China ‘s SSE falling after weak property prices data. Sesa Sterlite was top gainer after its Rs.2500 expansion plan. HDFC was top loser on Nifty. As, Nifty sustained 8425, volatility as indicated by India VIX fell 2.39%” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian equity markets traded in a narrow range today due to lacklustre movement in global markets and caution ahead of US FOMC minutes. India’s Q2 GDP data expected by end of month also remained in focus. Nifty opened higher but resisted 8450 mark as profit taking dragged the index. Profit booking dragged private banks while PSB were positive as SBI posted stable Q2 results last week. Strength in Rupee dragged export oriented major IT stocks. Globally, Asian indices closed mixed and Wall Street range bound thus providing no positive cues for Indian equity markets. European markets inched higher on expectations of stimulus from ECB. Volatility in markets fell by 2.39% as Nifty held 8425.

Other Asian Markets

Asian indices closed mixed. Japan’s Nikkei recovered from yesterday’s losses in anticipation of Prime Minister’s announcement of an early election and possible delay in sales tax hike. China’s benchmark SSE fell as China posted weak property price data for October. KOSPI gained 1.2% on stimulus hopes from ECB.

Commodity Outlook:

Commodity Market was very volatile in the morning session. Gold and Silver Prices showed strength in morning session gaining over a percent each as Investors came in at lower levels ahead of FOMC minutes. Crude Oil Prices went up ahead of FOMC minutes while Natural Gas Prices continued to gain on chilly weather forecasts in USA. Base Metals were mostly up as they received good support from the strength of Global Equity Markets

Evening outlook:

Gold and Silver Prices are expected to strong in the Evening session; Crude Oil is expected to continue its gains while Natural Gas is also expected to make gains; Base Metals could be steady in the Evening session.

Stock Recommendations:

ONGC – Buy at Rs.390.65(CMP); Target - Rs.395.00; Stop Loss – Rs.387.00

Tech Mahindra – Sell at Rs.2596.45(CMP); Target - Rs.2570.00; Stop Loss – Rs.2622.00

BPCL – Sell at Rs.719.90(CMP); Target - Rs.712.50; Stop Loss – Rs.727.00

Sectors Snapshot

Bank Nifty: Bank Nifty rose marginally and was supported by PSU banks. SBI posted stable Q2 results which induced buying in PSBs while Private Banks witnessed profit taking and weighed on the index. HDFC Bank registered gains and recovered on short covering after yesterday’s fall. Bank Nifty rose 0.35%.

CNX IT: Major export oriented IT stocks induced negative momentum on the index. Rupee came off day’s lows thus weighing on large cap IT stocks. After recent up move, profit taking was also seen in mid cap constituents of CNX IT. Globally also tech stocks remained weak.

CNX Energy: The energy sector was seen trading flat in the session today. OMCs continued to trade weak after poor Q2 results while ONGC and Cairn India Prices also fell due to falling global Crude Prices. Reliance Power and Power Grid were the major gainers in the sector, thus holding the sector up.

CNX Pharma: Pharma index came off day’s high as major stocks such as Ranbaxy and Sun Pharma induced negative sentiment. Possible delay in Sun Pharma-Ranbaxy deal kept stock prices under pressure. Also, investors were seen booking profit in Pharma stocks

Market Movers

Gainers

Sesa Sterlite: Share price rose as company is set to take up the Rs 2,500-crore expansion at its copper smelter plant in Tuticorin and also on the talks that govt. would raise import duty on steel.

IDFC: IDFC shares hit 3 month high ahead of IDFC Annual India Conference. As company is transiting from infrastructure financier to a bank, buying was seen in stock.

Losers

HDFC: HDFC shares were top loser over concerns that the mortgage lender will have to shed some of their holdings after FIPB classified the parent's holding in the banking subsidiary.

Kotak Mahindra: Banking index was seen flat as investors were cautious after Japan's GDP data released. Shares were down due to profit booking was seen in Banking sector.

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