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WealthRays Securities

Source Name: WealthRays Securities

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

Oct 07, 2014   12:55 IST 
India

Synopsis:

Indian equity markets opened on a weak note today after long holidays and tracked weakness from global markets.US markets closed with caution in previous session ahead of FOMC minutes this week. Also, Asian markets also closed mixed providing no support to Indian markets. Market participants remained cautious ahead of the IIP and CPI data due later this week with this cautious approach triggering profit booking. Nifty opened lower and traded with a negative bias. PSU power stocks along with Wipro and TATA motors traded in green on Nifty while most stocks were in negative. Realty, PSB, Pharma and metal stocks dragged the index. Nifty closed below 7900 levels at 7952.40.

 

Indian Markets

Indian equity markets opened on a weak note today after long holidays and tracked weakness from global markets.US markets closed with caution in previous session ahead of FOMC minutes this week. Also, Asian markets also closed mixed providing no support to Indian markets. Market participants remained cautious ahead of the IIP and CPI data due later this week with this cautious approach triggering profit booking. Nifty opened lower and traded with a negative bias. PSU power stocks along with Wipro and TATA motors traded in green on Nifty while most stocks were in negative. Realty, PSB, Pharma and metal stocks dragged the index. Nifty closed below 7900 levels at 7952.40.

USINR opened lower today after the Indian markets remained closed for three sessions on account of holidays. The pair opened lower by 20 paisa and continued to trade on the lower side. Support by RBI can be anticipated at this point to stem Rupee fall. US payroll data came strong with unemployment falling to 5.9%. USD Index was trading up by 0.77% while most of the Asian currencies were strong against USD. Going forward weakness in equity markets and outflows may hurt strength in Rupee.

 

Other Asian Markets

Asian markets closed mixed after BoJ monetary policy and Reserve Bank of Australia’s policy. Both maintained status quo on the policy. Nikkei closed in red as BoJ revised down industrial output assessment. SSE remained closed on account of holidays. HSI erased losses and closed in green.

 

Commodity Outlook:

Commodity Market was very volatile in the morning session. Gold and Silver Prices showed some strength due to weak Equity Markets but fell as the session progressed as Global demand remained sluggish for Bullion. Crude Oil Prices also fell in the morning session due to ample global supply and Natural Gas Prices remained steady after Profit taking hampered its momentum in the previous sessions. Base Metals remained mixed in the morning session but trading was low due to uncertain Equity Markets and global supply concerns.

 

Evening outlook:

Bearish sentiment is expected to continue for Gold and Silver; Crude Oil may rebound slightly and Natural Gas is expected to remain steady; Trading could continue to be low for Base Metals.

 

Stock Recommendations:

ONGC – Buy at Rs. 396.75(CMP); Target - Rs.401.00; Stop Loss – Rs.392.00

Yes Bank–Buy at Rs.551.10(CMP); Target - Rs.557.00; Stop Loss – Rs.546.00

Future Retail– Sell at Rs.113.60(CMP); Target - Rs.111.00; Stop Loss – Rs.116.00

 

Sectors Snapshot

Bank Nifty: Bank Nifty traded under pressure today with almost all banks trading in red while ICICI bank closed flat.PSU banks remained under pressure ahead of IIP and CPI data this week. Bank of Baroda, closing down by 3.58%, was the top loser on the index. PSB major SBI also dragged the index by losing 2.35%.

CNX Energy: Energy index opened lower and showed strength but soon erased gains. Constituents were mixed with OMCs dragging the index. Cairn India was top loser on the index. Cairn India closed down by 4.12%.

CNX Pharma: Major Pharma stocks were down with outflow seen from Lupin, Ranbaxy and Sun Pharma with all losing close to 3%. Dr. Reddy and Cipla also saw outflows and shed more than 3%.

CNX Media: Media index also lost more than a percent as overall breadth remained negative on the index. Den Networks saw a volatile session and lost more than 9%. Major stocks were negative on the index.

India VIX: Fear escalated in markets & VIX gained 11.25%.

 

Market Movers

Gainers

NTPC: The co signed a coal swapping agreement with GSEC to swap 10 lakh MT of coal. This could lead to savings of around 500 crore for NTPC. NTPC also got approval for $250 mn loan from Mizuho Bank for funding its expansion plans

Losers

DLF: Following the allegations of evading service tax and as the company was under scanner for the issue weakness continued in the stock. Investors exited the stock in weak market with the stock losing 5.85% and remaining below its 200EMA.

 

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