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WealthRays Securities Source Name: WealthRays Securities

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

Oct 09, 2014   16:23 IST 
India

Synopsis:

Indian equity markets rallied today and made a stellar recovery after previous session’s sell off. The rally was fired by the dovish Fed minutes which suggested that rate hike will not be sooner. Global markets rallied and European markets also opened in green and showed strong momentum thus providing strength to Indian markets. Nifty opened higher and closed above 7950 at 7960.55. Sensex also rose 390.49 points closing 1.49% higher. Capital goods, banking and cement stocks led gains on Nifty while IT stocks showed weakness. Advance decline ratio on Nifty was at 41:9. Stable Rupee and fall in global oil prices helped positive sentiment in equity markets.

 

Indian Markets:

Indian equity markets rallied today and made a stellar recovery after previous session’s sell off. The rally was fired by the dovish Fed minutes which suggested that rate hike will not be sooner. Global markets rallied and European markets also opened in green and showed strong momentum thus providing strength to Indian markets. Nifty opened higher and closed above 7950 at 7960.55. Sensex also rose 390.49 points closing 1.49% higher. Capital goods, banking and cement stocks led gains on Nifty while IT stocks showed weakness. Advance decline ratio on Nifty was at 41:9. Stable Rupee and fall in global oil prices helped positive sentiment in equity markets. Most Asian currencies gained against USD today. USDINR pair opened lower and traded below 61.00 mark in a range of 60.95 to 61.00. Dollar paused its rally with USD index falling 0.16% after the Fed minutes which suggested that Fed may take to hike interest rates. Strength in equity markets after recent correction and outflows also provided strength to Rupee. RBI announced a OMO of Rs.10, 000 crores to suck liquidity from market. GOI ten year yields rose 44 basis points at 8.473%.

 

Other Asian Markets:

Nikkei gave up its gains after trading in positive territory as Yen strengthened. Shanghai index closed in positive as Yuan rose against USD. Strength in Wall Street in previous session provided strong opening to Asian markets. Australian index also recovered and closed 1% higher.

 

Commodity Outlook:

Commodity Market was very volatile in the morning session. Gold and Silver Prices showed lot of strength in the session as concerns of rate hike by the Fed eased after the FOMC minutes yesterday. Crude Oil Prices continued to fall after bearish US supply data in USA and abundance of global supply. Natural Gas also traded weak as investors were cautious ahead of weekly US supply data. Base metals showed strength in the morning session as they were supported by surging Equity Markets which were fuelled by FOMC minutes.

 

Evening outlook:

Gold and Silver are expected to make strong gains in the Evening session; Crude Oil and Natural Gas are expected to trade weak while Base Metals are expected to be steady.

 

Stock Recommendations:

HDIL – Buy at Rs.83.35(CMP); Target - Rs.84.50; Stop Loss – Rs.82.50

ITC –Buy at Rs.365.50(CMP); Target - Rs.370.00; Stop Loss – Rs.362.00

BHEL – Buy at Rs.219.05(CMP); Target - Rs.222.00; Stop Loss – Rs.217.00

 

Sectors Snapshot

Bank Nifty: Bank Nifty rallied today after dovish fed minutes which suggested that sooner rate hike is not on cards. Bank Nifty rallied 397.20 points today. Overall breadth remained positive on the index with strong recovery in each constituent. Federal bank (+7.81%) was top gainer on the index.

CNX Energy: Energy index gained for second session led by gains in power stocks while OMC stocks witnessed some profit booking. Reliance power (+3.20 %) was top gainer on the index.

CNX Pharma: CNX Pharma also recovered after yesterday’s selloff. Recovery was seen in major stocks such as Cipla (+1.03%), Sun pharma (+1.74 %). Most stocks remained positive in the session.

CNX Media: media index rallied today as major stocks attracted inflows. The index made steady gains with no signs of weakness. Den network (+9.40 %) was top gainer on the index. Major stock Zee entertainment rallied 4.94% lifting the index.

India VIX: VIX lost 6.78% as markets rallied & fear eased.

 

Market Movers:

Gainers

BHEL: The shares of the company were seen up as the company got a 78 billion engineering, procurement and construction order from Tamil Nadu Generation and Distribution Corp. The shares of the company were the top gainer amongst the Nifty constituents gaining 8.39% to close at 219.05.

Losers

Tech Mahindra: The stock was seen falling for the consecutive two days after Citigroup downgraded the stock from neutral to sell. Money outflow was seen from the stock in last two sessions. The stock has seen a downfall of more than 7% in last two days. In today’s session it fell by 2.49% to close at 2336.45.

 

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