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

Synopsis:

“Indian equity markets opened higher after an all-time low CPI inflation at 6.46%. Nifty opened higher by 38.8 points but gave up gains early in the trade tracking weakness from Wall Street. Nifty took a strong support at 7830 and rebounded to touch 7900 as WPI at 2.38% cheered the markets. State assembly election outcome in Maharashtra and Haryana and Q2 earnings were eyed by investors. European markets remained under pressure and traded in red. Nifty was supported by capital goods; banking stocks while HCL tech and DLF. DLF lost 28.56% after SEBI barred the realty major from capital markets for 3 years. Nifty closed at 7864 losing 20 points”, Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian equity markets opened higher after an all-time low CPI inflation at 6.46%. Nifty opened higher by 38.8 points but gave up gains early in the trade tracking weakness from Wall Street. Nifty took a strong support at 7830 and rebounded to touch 7900 as WPI at 2.38% cheered the markets. State assembly election outcome in Maharashtra and Haryana and Q2 earnings were eyed by investors. European markets remained under pressure and traded in red. Nifty was supported by capital goods; banking stocks while HCL tech and DLF. DLF lost 28.56% after SEBI barred the realty major from capital markets for 3 years. Nifty closed at 7864 losing 20 points.

Rupee opened higher today but showed weakness as equity markets were under pressure and Dollar resumed its up move. USDINR opened at 60.92 but broke 61 mark and made up move towards 61.25. USD Index was trading up by 0.13%. Major world currencies were mixed to weak against USD. Most Asian currencies were weak against USD. FII outflows kept Rupee under pressure while investors were cautious ahead of Maharashtra poll outcome. WPI inflation came at 2.38% but market participants did not expect a rate cut by RBI any time soon.

Other Asian Markets

Major Asian indices closed in red giving up gains. SSE lost gains and closed down by 0.28% after the Chinese central bank’s lower guidance rate. Nikkei also closed down by 2.38% tracking weakness from US markets. European markets also opened in red and traded with negative bias.

Commodity Outlook:

Commodity Market showed good volatility in the morning session. Gold and Silver showed strength due to uncertain Equity Markets and dip in the dollar. Crude Oil continued to remain weak due to increase in supply at the global level and Natural Gas Prices gained on chilly weather forecasts in USA. Base Metals made modest gains in the morning session with Copper leading the way due to falling dollar.

Evening outlook:

Gold and Silver Prices are expected to show strength in the Evening session as Equity Markets are expected to remain weak; Crude Oil is expected to slide while Natural Gas could make gains in the Evening session; Base Metals could continue to remain steady.

Stock Recommendations:

BHEL – Buy at Rs.226.00(CMP); Target - Rs.230.00; Stop Loss – Rs.223.00

ZEE Ltd. –Buy at Rs.316.00(CMP); Target - Rs.320.00; Stop Loss – Rs.312.00

Canara Bank – Buy at Rs.379.45(CMP); Target - Rs.385.00; Stop Loss – Rs.375.00

Sectors Snapshot

Bank Nifty: Bank Nifty opened higher gave up gains in early session but cheered the WPI data and registered gains closing 74.05 points higher. Public banks gained and overall bias was positive on the index. Bank of India was top gainer on the index while HDFC bank lost 0.96% and was the only constituent closing in red.

CNX Energy: Energy index also opened higher but gave up gains and closed near the intraday low of the day. CNX Energy closed down by -0.14%. The index was dragged by OMC stocks with IOCL (3.24%) top loser on the index. Reliance also gave up gains after posting a positive Q2 result.

CNX Pharma: Pharma index also came off intraday highs and closed up by 0.20%. Most pharma stocks remained flat. Major stocks closed flat to negative. Divi’s Lab (+2.22%) was top gainer on the index.

CNX Media: Media index also gave up gains as majors Zee and Sun TV lost momentum. Den Networks rallied 19.97% with heavy volumes. Sun TV was top loser on the index.

India VIX: India VIX gained 0.64% in volatile market.

Market Movers

Gainers

BHEL: The stock price of the company is consecutively moving up after the company has won 78 billion rupee EPC order. Though the sector outlook is seen weak ahead of the results, BHEL is seen gaining on expectation of better results. The shares were up by 3.57% to close at 226.00.

Losers

DLF: Shares of the company were sown as Delhi High Court rejected DLF's petition challenging CCI's jurisdiction to investigate the sale of company's flats prior to 2009. The Court also charged the company for attempting to delay the proceedings by filing the petition. Shares were down by 3.77% to close at 146.90.

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