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

Nifty ends below 8400, financial stocks gains

“Indian equity markets rallied today on back of positive sentiment that emerged from the 2 year high HSBC manufacturing PMI which came in at 54.5. The surge in PMI indicated that the industrial activity has picked up in December, also expectations of cooling inflation in December further made strong case for rate cut. The sentiment was also lifted by Gyan Sangam meet which will witness participation of Prime Minister, Finance Minister and the RBI governor. Major issues ranging from bad asset quality in banks to top management restructuring in PSBs will be on agenda. Banking stocks delivered a stellar performance today with private banks performing. IT sector also led the rally on elevated currency levels. Auto stocks were under pressure after excise duty cuts were taken back by govt. yesterday. While European shares were in red, US premarket suggested positive open.” Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian equity markets rallied today on back of positive sentiment that emerged from the 2 year high HSBC manufacturing PMI which came in at 54.5. The surge in PMI indicated that the industrial activity has picked up in December, also expectations of cooling inflation in December further made strong case for rate cut. The sentiment was also lifted by Gyan Sangam meet which will witness participation of Prime Minister, Finance Minister and the RBI governor. Major issues ranging from bad asset quality in banks to top management restructuring in PSBs will be on agenda. Banking stocks delivered a stellar performance today with private banks performing. IT sector also led the rally on elevated currency levels. Auto stocks were under pressure after excise duty cuts were taken back by govt. yesterday. While European shares were in red, US premarket suggested positive open

Other Asian Markets

Asian markets were largely in positive zone today with lack of global cues. Chinese and Japanese markets were closed on account of New Year eve. HSI closed higher led by gains in financial stocks. While Singapore's STI brushed off GDP data released on Friday and closed in positive territory.

Commodity Outlook:

Commodity Market traded flat in the morning session; Gold and Silver Prices were weak in the morning session as Equity Markets rallied in the morning session; Crude Oil Prices rebounded while Natural Gas Prices also showed signs f moving up due to bargain hunting by Investors; Base Metals were little moved in the morning session due to holiday in Chinese Markets.

Evening outlook:

Gold and Silver Prices are expected to be weak in the Evening session; Crude Oil and Natural Gas could retain their gains in the evening session while Base Metals could also show strength.

Stock Recommendations:

Federal Bank - Sell at Rs. 149.00(CMP); Target -Rs. 147.50; Stop Loss –Rs. 150.50

NTPC – Buy at Rs.144.40(CMP); Target –Rs.146.00; Stop Loss –Rs.142.50

Cairn India - Buy  Rs.241.40(CMP); Target – Rs. 245.00; Stop Loss – Rs. 239.50

Sectors Snapshot

Bank Nifty: Bank Nifty was lifted by positive HSBC manufacturing PMI for month of December. Also, retail inflation expectations for month of December were positive making a case for rate cut by RBI. Private Banks witnessed strong flows with PSBs also gaining. Gyan Sangam which started today also developed hopes for solution of various problems faced by PSBs.

CNX IT: IT index took a breather in previous session but was lifted today major export oriented stocks. Elevated levels of Rupee kept investor interest in IT stocks. Many mid cap tech stocks were seen witnessing inflows on positive outlook for 2015.

CNX Energy: Energy Sector gained around 40 points in the session today; Oil Producers rallied today as Global Crude Oil Prices rebounded while OMCs dragged the sector due to cut in petrol and diesel Prices.

CNX Pharma: Index opened higher tracking positive opening of rupee however profit taking was seen at later stage and index managed to close marginally up. Most of the stocks were seen up among the index while Glaxosmithkline and Glenmark pharma was the two losers.

Market Movers

Gainers

HDFC: Shares of housing finance companies were seen up after a positive expectation from the conclave. HDFC was the top gainer among Nifty

Asian Paints: Shares of paint companies were seen up as crude prices continue to remain under pressure, where Asian Paints was one of the major gainer.

Losers

BPCL: Though energy was seen up, BPCL was one of the losers as crude prices continue to remain under pressure building inventory cost for OMC’s.

M&M: Shares of auto companies were seen under pressure. While M&M total auto sales for Dec was down which kept pressure on the share prices.

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