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

Sep 24, 2014   16:34 IST 
India

Synopsis:

Indian benchmark indices witnessed huge volatility today ahead of Sept. expiry and SC coal block allocation verdict. Metal and power stocks witnessed huge sell off after SC de allocated 214 coal blocks from private players.  JSPL lost close to 14% intraday while NTPC, Coal India and Reliance power shares gained as 4 blocks were exempted from the decision. The coal block de allocation will happen after six months. Banking shares also dragged Nifty ahead of RBI policy on 30th Sept. Coal India and defensives like ITC, Cipla and IT stocks Infosys and Wipro provided support to Nifty. Fall in business activity in Euro zone also kept markets under pressure. Nifty closed above 8000 at 8002.40.

 

Indian Markets

Indian benchmark indices witnessed huge volatility today ahead of Sept. expiry and SC coal block allocation verdict. Metal and power stocks witnessed huge sell off after SC de allocated 214 coal blocks from private players.  JSPL lost close to 14% intraday while NTPC, Coal India and Reliance power shares gained as 4 blocks were exempted from the decision. The coal block de allocation will happen after six months. Banking shares also dragged Nifty ahead of RBI policy on 30th Sept. Coal India and defensives like ITC, Cipla and IT stocks Infosys and Wipro provided support to Nifty. Fall in business activity in Euro zone also kept markets under pressure. Nifty closed above 8000 at 8002.40.

USDINR remained in a narrow range after opening higher. Rupee took support at 61.05 and fluctuated in a range of 60.992 and 61.05. Demand from oil importers exerted some pressure on Rupee. RBI policy was in focus, expectation of a dovish view by RBI was expected by market participants. USD Index was slightly up as equity markets closed. Most Asian currencies were slightly strong against Dollar.

 

Other Asian Markets

Asian indices closed mixed. Weakness from Wall Street weighed on Nikkei. Nikkei closed down by 0.24%. China gained as IMF expected growth above 7% in FY15. SSE rose 1.5%. HSI erased losses and closed 0.35% higher. KOSPI closed up by 0.33%.

 

Commodity Outlook:

Commodity Market showed moderate volatility in the morning session. Gold and Silver Prices showed strength due to sluggish Equity Markets and geopolitical tensions but their upper side remain limited as Investors were cautious due to strong dollar. Crude Oil traded cautiously ahead of US supply data and Natural Gas Prices looked weak. Base Metals also looked weak despite strong Factory data from China. Global supply concerns weighed on their prices.

 

Evening outlook:

Gold and Silver Prices are expected to show some strength; Crude Oil could continue to trade cautiously while Natural Gas could trade sideways; Base Metals are expected to remain weak in the evening session.

 

Stock Recommendations:

Reliance Power– Buy at Rs 75.95(CMP); Target - Rs 77.50; Stop Loss – Rs 74.50

Coal India– Buy at Rs 351.35(CMP); Target - Rs 355.00; Stop Loss – Rs 347.50

IDFC– Sell at Rs 142.35(CMP); Target - Rs 140.50; Stop Loss – Rs 143.50

 

Sectors Snapshot

Bank Nifty: Bank Nifty fell 162.55 points ahead of RBI policy. HDFC and Federal banks only closed in positive. Public banks witnessed sell off with majors SBI and Bank of Baroda falling close to 2.5%. Bank of India and Canara Bank were top losers on the index.

CNX Energy: Energy index gained today lifted by positive movement in Reliance power as it received exemption from de allocation from Sasan UMPP. Other stocks were flat and mixed. ONGC also rose close to 2%. Reliance power was top gainer closing up by 5.49%.

CNX Pharma: Defensives witnessed inflows today and CNX Pharma rose 0.98% lifted by recovery in Cipla which closed up by 2.69%. Major stocks also supported the rise with Ranbaxy rising 1.12%. Galxo Pharma was top gainer on the index.

CNX Media: Media index lost 0.48% amid weakness in market. Major stocks were dragging the index with Sun TV falling 2.88% and PVR falling 2.43%. Most constituents closed in red.

India VIX: India VIX closed up by 1% ahead of expiry.

 

Market Movers

Gainers

Coal India: Shares of the company were seen up due to Supreme Court verdict on coal block allocation came this afternoon, which canceled all the coal block allocation. The share prices were up on the expectation that all blocks would be allocated to Coal India. The shares were up by 4.83% to close at 351.35.

Losers

JSPL: The shares of the company and all the metal sector was down after the Supreme Court verdict on coal block allocation cancelling all the private and PSU JV companies allocation. Shares of the company were the major loser among all the metal companies and among Nifty Constituents. Shares fell by 10.15%.


 
 
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