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

Nifty sheds 143 points; weak Bank of Baroda Q3 weighs

“Indian equity markets witnessed today the effects of US Fed’s view on US economy and fears of a rate tightening cycle in US today. Though global markets remained mostly up with F&O expiry yesterday markets witnessed sharp profit booking today. Euro zone inflation came at -0.6% lower than expected keeping fears of low growth alive in Euro zone. On domestic front RBI policy and tone of governor on further rate cut cues was eyed. Q3 earnings triggered a sell off on banking and financial stocks today. Bank of Baroda posted weak Q3 results causing significant sell off on PSBs and private banks. On the other side HCL tech posted robust earnings but failed to support the index. Sharp profit taking was also seen on Auto stocks. Weakness in Rupee further triggered outflow in rate sensitive stocks. ” , Mr. Kiran Kumar Kavikondala said.

Other Asian Markets

Asian markets traded mixed today. The markets were lifted by Yellen comments while the overall breadth remained subdued on Asian indices. SSE composite saw sharp profit booking closing down by 1.59%.

Commodity Outlook:

Commodity Market was very volatile in the morning session; Gold and Silver Prices surged in the morning session after the slide in the session yesterday. Mixed Equity Markets provided their prices support. Crude Oil continued to stay at lower levels in the morning session while Natural Gas Prices also continued to slip after bearish US stockpile data. Base Metals rebounded in the morning session due to technical buying at lower levels.

Evening outlook:

Gold and Silver are expected to remain range bound in the evening session; Crude Oil and Natural Gas are expected to be flat while base metals could continue to rebound in the evening session.

Currency

Rupee weakened further taking cues from FOMC and USDINR pair was seen trading at 62 taking support at 61.97. USD index was seen weak against the other major Asian currencies. Euro witnessed strength against the greenback due to decline in unemployment report. Inflation rate in Euro area was posted negative conforming deflation in the economy. Weak equity markets after F&O expiry yesterday and weakness in banking results kept Rupee under pressure.

Stock Recommendations:

Axis Bank - Sell at Rs.588.10(CMP); Target -Rs.582.00; Stop Loss –Rs.594.00

Reliance Capital - Buy at Rs.486.10(CMP); Target -Rs.491.00; Stop Loss –Rs.481.00

ONGC – Buy at Rs.351.90(CMP); Target -Rs.356.00; Stop Loss –Rs.349.00

Sectors Snapshot

Bank Nifty: Bank Nifty witnessed sharp profit booking today after Bank of Baroda posted weak Q3 numbers. Bank of Baroda posted lower PAT on higher NPA provisioning of Rs.3.31 billion. Most PSBs took negative cues from BoB and saw selloff. Weak Rupee also kept financials under pressure.

CNX IT: IT index saw flat movement today with major stocks moving in opposite direction. HCL posted strong results which lifted the stock as much as 8% while limited gains were seen on most IT stocks keeping index under pressure in weak market. Rupee remained under pressure which supported major IT cos.

CNX Energy: Energy sector lost just over 30 points in the session today despite the steep fall in Nifty; BPCL held the index up by gaining more than 2% while other companies traded from flat to positive in the session today.

CNX Pharma: Index opened higher tracking positive global markets but continued to trade with weak sentiments as profit taking was seen across the sectors. Fall in rupee limited the downfall while Dr. Reddy’s was the top loser due to profit taking after rise in previous session due to better results posted by the company.

Market Movers

Gainers

HCL Tech: Shares of the company touched all time high at 1820 after posting robust results for Oct-Dec quarter.

TATA Power: Shares rose as the company to buy Nelco's biz vertical also signed 172MW wind power deal with Inox Wind.

Losers

Bank of Baroda: Shares were down over 11% after company posted disappointing Oct-Dec results. Net profits were seen much below the estimates.

SBI: Weak results posted by Bank of Baroda weighed pressure on Bank nifty dragging other banking stocks. SBI was down by 5.52%.

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