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

Nifty sustains 8000; Global volatility weighs, FOMC eyed

“Indian equities witnessed another volatile session with participants trading with a negative bias. Nifty opened lower and continued to break 8000 levels as banking and IT stocks weakened. Global markets continued its fall, Rupee remained under pressure leading to a negative momentum on Nifty. Metal stocks were as positive move was seen in Chinese markets while outflow was seen from defensives and IT stocks with private banks remaining weak on account of strength in USD. Major FOMC policy decision is expected in US today which kept markets under pressure. Investors turned cautious and exited the markets on anticipation that Fed may hike interest rates earlier than expected as unemployment in US is falling and recovery is seen on cards. Another factor affecting markets was weak oil prices suggesting global slowdown and Russia’s financial turmoil” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian equities witnessed another volatile session with participants trading with a negative bias. Nifty opened lower and continued to break 8000 levels as banking and IT stocks weakened. Global markets continued to fall; Rupee remained under pressure leading to a negative momentum on Nifty. Metal stocks were as positive move was seen in Chinese markets while outflow was seen from defensives and IT stocks with private banks remaining weak on account of strength in USD. Major FOMC policy decision is expected in US today which kept markets under pressure. Investors turned cautious and exited the markets on anticipation that Fed may hike interest rates earlier than expected as unemployment in US is falling and recovery is seen on cards. Another factor affecting markets was weak oil prices suggesting global slowdown and Russia’s financial turmoil.

Other Asian Markets

Asian indices were largely flat to positive and traded with caution ahead of US FOMC policy tonight. Nikkei recovered from lows and bucked strong trend in Yen. Exports stocks supported up move on Nikkei. Other major Indices also cut losses with Chinese shares gaining as anticipation of RRR cut remained among market participants. SSE rallied 1.31%. Russia’s financial turmoil weighed on markets along with weakening oil prices. Currencies remained flat against the greenback.

Commodity Outlook:

Commodity Market traded flat in the morning session. Gold and Silver were range bound as Investors were cautious ahead of the Fed minutes. Crude Oil Prices continued to dip on supply concerns while Natural Gas Prices traded flat due to uncertain short term weather forecasts in USA. Base Metals dipped to new lows in the morning session as speculations surrounding the Fed minutes continued to haunt markets.

Evening outlook:

Gold and Silver Prices are expected to be range bound in the evening session; Crude Oil and Natural Gas Prices are expected to remain weak while Base Metals could trade flat in the Evening session

Stock Recommendations:

SBI - Buy at Rs. 301.75; Target – Rs.306; Stop Loss – Rs.298

BHEL –Buy at Rs.245.05 (CMP); Target –Rs.250.00; Stop Loss – Rs. 242.00

ICICI Bank - Buy at Rs.332.35 (CMP); Target –Rs.338.00; Stop Loss –Rs. 328.00

Sectors Snapshot

Bank Nifty –Banking stocks again opened lower and could not make a recovery as currency remained under pressure triggering outflows in equities. Another important reason for investors getting cautious was upcoming FOMC policy decision in US. Russia’s weakness in financial system added fuel to the fire.

CNX IT: IT stocks were highly volatile today but the index closed in negative not sustaining the gains made during the session. Weak currency helped IT stocks to gain while weak closing in global tech stocks and NASDAQ weighed on investor sentiments.

CNX Energy: Energy sector was marginally up in the session today. Lot of bargain buying was seen in the sector as investors betted crude oil prices to rebound in the coming months. ONGC was the top gainer in the sector gaining over 2% in the session today.

CNX Pharma: Index opened lower and major sell off was seen in today's session. FII's were seen taking money of the drug companies. Most of the companies were down above 2%. Major Asian currencies were seen slipping down which weighed on the index. Aurobindo Pharma was the top loser among the index.

Market Movers

Gainers

SSLT: Shares plunged in today's session after losing over 7% in previous session on account of value buying. Metals space was seen up.

ONGC: Shares rose as company has awarded a 100 million euro contract for building onshore gas processing terminal in Andhra Pradesh scheduled to be completed in second half of 2016.

Losers

DLF: Shares fell from three consecutive sessions on a report that the government may set up regulatory bodies and appellate authorities for the sector in every state.

Asian Paints: Shares of the company continued to slip down on account of profit taking as shares had run due to falling crude prices.

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