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

Nifty breaches 8600; mood upbeat ahead of GDP data

“Indian benchmark indices delivered stellar performance today on back of strength in Banking and realty stocks. Banking and other rate sensitive stocks rose on hopes of a rate cut by RBI in its December credit policy review. Also, GDP data for Q2 was eyed keeping sentiment upbeat. IT stocks took a breather post its up move in previous session. Rupee weakened on back of month end Dollar demand from oil importers, RBI rate cut possibility and strength in the greenback against major currencies. OPEC did not cut supply and oil prices continued to fall supporting OMC stocks which also rallied today” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian benchmark indices delivered a stellar performance today ahead of Q2 GDP data. Strong GDP data is not anticipated but the strength was seen in indices as rate cut from RBI in its policy review was anticipated by market participants. Also, volatility reduced after expiry of November contracts and strong long rollover to December contracts was seen. Banking stocks rallied with Bank Nifty breaking 18,500 levels. Dovish tone by RBI is expected in December review. Also, cyclicals were also supported while fund rotation was seen from defensives such as pharma into banking and Auto stocks. OPEC decision not to cut supply also lifted OMC stocks giving boost to benchmark Nifty. IT stocks took breather after rally in previous session while weak Rupee restricted losses on major IT cos.

Other Asian Markets

Most Asian indices closed with a positive bias. Nikkei gained more than a percent as Yen weakened and indices consolidated in previous two sessions. Real estate stocks kept the momentum positive in Japan. SSE also outperformed as momentum remained positive and hoped that China’s central bank may ease rates further if economy doesn’t pick up.HSI recovered from day’s low to close flat.

Commodity Outlook:

Commodity market looked very weak in the morning session.  Gold and silver prices dipped in the morning session due to weak oil prices and strength of equity markets. Crude oil continued to dip in the morning session after OPEC status quo regarding supply while natural gas prices remained steady due to chilly weather forecasts in USA. Base metals traded cautiously ahead of GDP data and slump in oil prices kept them weak.

Evening outlook:

Gold and silver Prices could be range bound in the evening session; crude oil is expected to remain weak while natural gas could gain in the evening session; cautious mood is expected to continue in base metals.

Stock Recommendations:

M&M Financial services - Buy at Rs.310.35(CMP); Target –Rs.313.50; Stop Loss –Rs.307.00

Voltas - Sell at Rs.270.55(CMP); Target –Rs.267.50; Stop Loss –Rs.273.50

PNB – Buy at Rs.1072.30 (CMP); Target –Rs.1085.00; Stop Loss –Rs.1060.00

Sectors Snapshot

Bank Nifty: Bank Nifty delivered stellar performance today and closed above 18,500 mark on hopes of rate cut by RBI in its December credit policy review. Also, GDP data was eyed keeping sentiment upbeat. PSU banks were major gainers lifting the index. News of govt. stake sale in PSBs helped PNB and BoB rally.

CNX IT: CNX IT took breather today though Rupee was weak on back of demand of Dollar by oil importers. Some profit booking was seen in major stocks which dragged the index. 

CNX Energy: OMCs gained in the session today while oil producing companies lost as OPEC declared that oil production would not be cut in near future. Cairn India was the top loser in the index today losing over 2% due to fall in crude prices.

CNX Pharma: As the Indian indices run up by 1% in today's session ahead of GDP numbers to be released today, inflows were in seen in rate sensitive stocks, while pharma, IT and FMCG were seen flat and range bound. Lupin was the top gainer among the index on news that FIPB has approved the hike in FII investment limit.

Market Movers

Gainers

PNB: Punjab national bank rose today after media reports said that the government is considering selling its stake in the lenders to raise 891.2 billion rupees.

Bank of Baroda: PSB's were the major gainer among Nifty. Bank of Baroda gained 7.35% ahead of the report on cutting of government stake, also up to 15 billion rupees tier I bond issue plan was deferred.

Losers

Cairn India: Stocks slumps in today's session as crude oil prices declined to a four and a half year low after the OPEC kept its production target unchanged.

Sesa Sterlite: Metal space traded flat and most of the companies were seen down in today's session. Sesa Sterlite was the top loser amongst the index constituents on account of profit taking.

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