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

Synopsis:

“Indian benchmark indices opened lower today tracking weakness in global equity markets and weakness in Rupee. Nifty opened lower by about 14 points in pre open session but showed strength and breached 7800 intraday. IT stocks witnessed sharp profit booking on back of weak results of HCL tech and TCS while banking, cement and pharma stocks lifted the index. Mid cap and small cap indices also gained with mid cap index outperforming large cap. Market participants waited for Maharashtra and Haryana election outcome expected on Sunday. Global markets also rebounded in previous session with major US equity indices closing flat to negative. European markets opened in positive and gained providing positive sentiment to Indian markets.”, Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian benchmark indices opened lower today tracking weakness in global equity markets and weakness in Rupee. Nifty opened lower by about 14 points in pre open session but showed strength and breached 7800 intraday. IT stocks witnessed sharp profit booking on back of weak results of HCL tech and TCS while banking, cement and pharma stocks lifted the index. Mid cap and small cap indices also gained with mid cap index outperforming large cap. Market participants waited for Maharashtra and Haryana election outcome expected on Sunday. Global markets also rebounded in previous session with major US equity indices closing flat to negative. European markets opened in positive and gained providing positive sentiment to Indian markets.

Rupee opened flat today at 61.8350 and showed strength with USDINR pair taking support at 61.50. Most Asian currencies were strong against USD and major global currencies were also flat against USD with USD Index trading down by 0.05%. Strength in equity markets from lower levels provided support to Rupee while FII outflows in previous session continued keeping pressure on Rupee. US jobless claims came well than expected pausing rally in USD. Rupee is seen in a range of 61.0-61.7 in coming sessions.

Other Asian Markets

Major Asian indices closed in negative amid choppy session as global cues remained weak. Stronger Yen dragged export stocks and Nikkei closed down by 1.4%. SSE also closed in red after recovering during the session and giving up gains. HSI held on to gains and closed higher by 0.53%.

Commodity Outlook:

Commodity Market was very weak in the morning session with most of the commodities trading in red. Gold and Silver Prices lost some of the gains which they made during the rally yesterday as Equity markets showed signs of recovery and focus shifted back to Equities. Crude Oil made some gains in the morning session on bargain hunting while Natural Gas Prices remained weak during the morning session. Base Metals were mixed during the morning session as recovery in Equity Markets provided them support though global supply concerns remain.

Evening outlook:

Gold and Silver Prices are expected to fall further in the Evening session; Crude Oil could be range bound while Natural Gas could make some gains; Trading is expected to be low in Base Metals in the Evening session

Stock Recommendations:

Ultratech Cement– Buy at Rs.2317.75(CMP); Target - Rs.2340.00; Stop Loss – Rs.2295.00

Axis Bank  – Buy at Rs.401.60(CMP); Target - Rs.406.00; Stop Loss – Rs.397.00

GAIL – Sell at Rs.447.90(CMP); Target - Rs.434.00; Stop Loss – Rs.452.00

Sectors Snapshot

Bank Nifty: Bank Nifty opened higher and rallied 414.95 points. Private Banks were top gainers on the index with majors like ICICI bank and HDFC bank rallying close to 3%. Axis Bank (+2.02%) and Bank of India (+2.75%) registered gains ahead of Q2 results. Overall breadth was positive with bank nifty closing above 15900 at 15956.55.

CNX Energy: After showing weakness for previous two sessions Energy index recovered 0.62%. OMC stocks were positive today while NTPC (+1.95%) was top gainer on the index.

CNX Pharma: Pharma index also rose today but gave up some gains in last hour of the session. Cipla (+2.93%) and Lupin (+2.14%) lifted the index while other majors were flat to positive.

CNX Media: Media index recovered losses made in previous session and closed higher by 2.15%. The index was lifted by Zee which closed up by 3.28%. Most were positive in the session showing strength.

India VIX: India VIX lost 0.2% as markets showed strength.

Market Movers

Gainers

ZEE Entertainment: Shares of the company were seen gaining momentum in the beginning of the session ahead of the earnings results of Q2 which was expected to be good touching intraday high at 331.50. Later gains were erased as the earnings were below the estimates and closed at 322.40 up by 3.28%.

Losers

HCL Tech: Shares of IT companies were seen down due to weak earnings. Shares of HCL were down by 9.08% followed by TCS as the company's top line was seen below estimates. Margins fell 0.3% to 23.9% from 24.2%. It was the worst performer among Nifty and closed at 1505.5

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