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

Synopsis:

Indian equity markets saw sharp profit booking today with Nifty erasing gains made in previous session and closing at 7859.95. The weakness was a result of worries about growth in Euro area and disinflation risks which were reiterated by ECB president Draghi. US markets also saw sharp profit booking with Dow losing more than 300 points. FII outflows continued in markets with Rupee also showing weakness. Infosys posted strong results with Q2 net up by 7% and strong Dollar revenue growth of 3.1%. Infosys supported Nifty along with pharma stocks while metal, auto and banking stocks dragged the benchmark.

 

Indian Markets

Indian equity markets saw sharp profit booking today with Nifty erasing gains made in previous session and closing at 7859.95. The weakness was a result of worries about growth in Euro area and disinflation risks which were reiterated by ECB president Draghi. US markets also saw sharp profit booking with Dow losing more than 300 points. FII outflows continued in markets with Rupee also showing weakness. Infosys posted strong results with Q2 net up by 7% and strong Dollar revenue growth of 3.1%. Infosys supported Nifty along with pharma stocks while metal, auto and banking stocks dragged the benchmark. USD INR opened flat today and moved up as equity markets remained under pressure and FII outflows continued.

Global indices fell and USD was strong. Most Asian currencies were weak against USD. USD index also moved higher as major global currencies were weak against the greenback. Rate hike fears, weak European economic data and anticipation of weakness in global economy weighed on Rupee with Dollar seen as a safe haven by investors. USDINR pair traded in a range of 20 paisa today and took support at 61.05.

 

Other Asian Markets

Asian indices closed in deep red as US markets witnessed selloff in previous session. Energy sector stocks fell sharply. Nikkei lost 1.1% ahead of the holidayon Monday. SSE composite also saw profit taking after it rallied in previous session. Weak growth in Euro area also weighed on markets today.

 

Commodity Outlook:

Commodity market was very weak in the morning session. Gold and Silver Prices dipped in the morning session after Bank of England kept interest rates constant and gave indications of early rate hike. Crude Oil prices continued to hover at lower levels due to abundance of global supply and Natural Gas remained flat after reports of warm weather forecasts in USA. Base Metals continued to be weak in the morning session with Copper Prices continuing to fall on strong dollar.

 

Evening outlook:

Gold and Silver are expected to make gains in the evening session.

Crude Oil is expected to weak while Natural Gas is expected to steady; Base Metals are expected to trade in a narrow range in the Evening session.

 

Stock Recommendations:

Reliance – Buy at Rs.960.65(CMP); Target - Rs.971.00; Stop Loss – Rs.951.00

DLF–Buy at Rs.152.65(CMP); Target - Rs.154.50; Stop Loss – Rs.150.00

IDFC – Buy at Rs.139.95(CMP); Target - Rs.141.50; Stop Loss – Rs.138.50

 

Sectors Snapshot

Bank Nifty: Bank Nifty fell 287.40 points today as profit taking was seen ion D Street. Rupee again traded above 61.00 and FII outflows continued in markets triggering profit booking in major banks. Private Banks fell most on bank Nifty with major ICICI bank falling 1.98%.

CNX Energy: Energy index also fell today as some profit booking was seen on energy stocks. Cairn India was top loser on the index. OMCs also could not sustain momentum and closed in red. CNX Energy lost 0.66%.

CNX Pharma: Defensives saw flat trade today as cyclicals were weak. Major stocks Sun Pharma, Cipla and Dr. Reddy’s were in green. Mixed trade was seen on CNX Pharma constituents.

CNX Media: Profit booking was seen on Media index constituents today after stellar performance in previous session. Den Networks gained 6.12% and was top gainer while most stocks remained negative in the session. Zee Entertainment dragged the index losing 1.85%

India VIX: VIX gained 8.93% as markets were weak.

 

Market Movers

Gainers

Infosys: Infosys shares hit life time high after recovering losses from previous session on account of robust July-September earnings. The earnings were better than the expected earnings. The company also announced 1 for 1 bonus shares issue. Stock was seen up by 6.63% to close at 3888.65.

Losers

JSPL: The shares were down tracking cues from weak market and erased most gains made in the previous session. The shares hit 5 year low falling 5.91% to close at 155.90.

 

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