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

Nifty dives as Dec F&O expiry hits; IT, Pharma drags

“Indian markets opened higher tracking record close on Wall Street. Nifty opened higher but could not breach 8300 markets as Chinese markets showed negative momentum dragging metals. Outflow was seen from Pharma and IT stocks while weakness in Rupee continued to weigh on banking stocks. Profit booking was seen on major banking stocks as Dec contracts expired. Cabinet gave nod to coal and insurance bill which provided little support to markets. F&O expiry and profit booking dragged the markets in late hours with Nifty Dec contracts expiring at 8175.  Thin trading in European markets before holiday also could not provide any concrete support to Indian benchmark indices. US Q3 GDP came in at 5% which caused up move on US equity indices, but this also raised some fears of early hike Fed given inflation comes to Fed's comfort level” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian markets opened higher tracking record close on Wall Street. Nifty opened higher but could not breach 8300 markets as Chinese markets showed negative momentum dragging metals. Outflow was seen from Pharma and IT stocks while weakness in Rupee continued to weigh on banking stocks. Profit booking was seen on major banking stocks as Dec contracts expired. Cabinet gave nod to coal and insurance bill which provided little support to markets. F&O expiry and profit booking dragged the markets in late hours with Nifty Dec contracts expiring at 8175.  Thin trading in European markets before holiday also could not provide any concrete support to Indian benchmark indices. US Q3 GDP came in at 5% which caused up move on US equity indices, but this also raised some fears of early hike Fed given inflation comes to Fed's comfort level.

Other Asian Markets

A Asian markets closed mixed today as Chinese markets faced volatility. Profit taking continued in SSE, financials and infra stocks dragged. Nikkei rose more than 1.5% on weak Yen and positive cues from Wall Street. Export stock supported the up move on index in Japan. The breadth remained largely positive in Asian indices on account of strong US Q3 GDP but Chinese and Indian markets bucked the trend.

Commodity Outlook:

Commodity Market was range bound in the morning session. Gold and Silver Prices were range bound in the morning session on strong dollar and strength of Equity Markets. Crude Oil continued to stay at lower levels as supply concerns continue to linger while Natural Gas Prices rebounded slightly from lower levels. Base Metals showed strength in the morning session after upbeat US GDP data but their upside continued to remain limited.

Evening outlook:

Gold and Silver Prices are expected to slide in the Evening session; Crude Oil and Natural Gas are expected to stay flat while Base Metals could make modest gains in the Evening session.

Stock Recommendations:

TVS Motors –Buy at Rs. 253.45(CMP); Target –Rs. 256.00; Stop Loss –Rs.250.50

Asian Paints- Sell at Rs. 728.45(CMP); Target –Rs.721.00; Stop Loss –Rs.735.00

Tata Power –Buy at Rs.81.20; Target – Rs.82.50; Stop Loss –Rs. 80.00

Sectors Snapshot

Bank Nifty: Banking index gave up all gains and traded in a red territory as currency continued to show weakness against rising USD. The fall was seen in major PSBs and HDFC Banks as expiry led to profit booking. Most banks gave up gains but limited their losses.

CNX IT: IT stocks were worst performers today continuing fall on CNX IT. Major stocks were down on account of weak close on NASDAQ which provided weak sentiments to Indian markets. Investors turned cautious at higher levels triggering a selloff in weak market.

CNX Energy: Energy Sector lost nearly 150 points in the trading session today as Crude Oil Prices resumed its slide. All stocks except Reliance Power closed in negative in this sector. Gail India was the biggest loser in the sector losing nearly 3% while other stocks were also more than 1% down.

CNX Pharma: Index opened lower and continued to trade with negative bias. Profit taking was seen in the major stocks today due to F&O expiry. Index fell over 1% where major stocks were seen under pressure. However Cadila Healthcare was up by 4.5%.

Market Movers

Gainers

Ultratech Cement: Shares of the company rose on the news that companies have increased the price of the cement bags.

ACC Cement: Cement space was seen up due to rise in cement prices by the companies. ACC cements increased Rs. 10 per 50kgs bag.

Losers

Gail India: Company has been asked to pay royalty on the $ 1.41 per unit it is collecting on natural gas produced from Reliance Industries' eastern offshore KG-D6 fields.

BHEL: Shares were seen down on profit taking after a sharp rise on Monday’s session as company got 16.96 million euro contract.

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