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

“Indian benchmark indices reversed early gains. RBI policy kept investors cautious while weakness in Rupee and profit taking weighed on banking stocks dragging the benchmark. Global markets also traded with negative bias on back of fall in major commodity prices of Brent and gold. Metals stocks were weak as Chinese markets were weak. Fund flow was seen in defensives such as FMCG stocks. As much of the RBI cut clamor has been factored in investors were seen booking partial profit in market” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian equity markets witnessed profit booking today and could not sustain gains made in early session. Major reasons which dragged the markets include cautious approach by investors ahead of RBI credit policy decision tomorrow as most of the rate cut clamour has been factored in the markets. Also, Rupee witnessed weakness weighing on banking stocks where PSBs witnessed profit booking. Volatility as indicated by VIX indicated in markets suggesting fear. Also, globally markets remained weak on back of fall in oil and gold prices. Asian markets could not sustain early gains and closed in negative while European markets followed the same trend. US pre market traded in negative providing negative sentiment to Indian markets. Energy stocks also fell as global oil prices fell.

Other Asian Markets

Asian indices closed mixed on back of falling oil prices which kept energy stocks under pressure. Cues from Wall Street in previous session also remained subdued weighing on the index. Nikkei bucked the trend and registered gains as Yen weakened against the greenback and corporate capex data showed strength. SSE saw profit booking erasing gains while HSI saw sharp fall closing 2.5% down.

Commodity Outlook:

Commodity Market was very volatile in the morning session. Gold and silver prices hit their 5 year lows in the morning but rebounded later on some speculative trading ahead of RBI policy. Crude oil prices stayed at multiyear lows in the morning session while natural gas prices also lost over 3% due to uncertain weather forecasts in USA. Base metals also traded weak in the morning session but rise in bullion prices gave them a boost.

Evening outlook:

Gold and silver are expected to remain steady in the evening session; Crude oil and natural gas are expected to make modest gains while base metals could continue to be weak in the Evening session.

Stock Recommendations:

Aurobindo Pharma - Buy at Rs.1119.40(CMP); Target - Rs.1130.50; Stop Loss – Rs.1108.00

Apollo Hospitals - Buy at Rs.1171.60(CMP); Target - Rs.1185.00; Stop Loss – Rs.1160.00

ONGC – Buy at Rs.364.40 (CMP); Target - Rs.369.00; Stop Loss – Rs.361.00

Sectors Snapshot

Bank Nifty: Bank Nifty opened higher but gave up early gains and traded in a flat range as investor mood remained cautious ahead of RBI credit policy tomorrow. Rupee also weakened but recovered and held on 62 mark weighing on banking stocks. Also, profit booking dragged public banks after recent run up.

CNX IT: IT index opened higher and gained as Rupee showed weakness while the breadth remained mixed on major stocks. USD remained strong against Asian currencies weighing on export oriented tech stocks. Persistent was top gainer on the index.

CNX Energy: Oil Producing companies lost significantly in the session today as Crude Oil Prices continued to tumble while OMCs also dipped on profit taking. ONGC was the biggest loser in the index today.

CNX Pharma: Index opened higher but could not sustain the gains and fell in later part of the session closing in red. Index was dragged by Piramal Enterprises and Glenmark Pharma which was hit by profit taking. Aurobindo Pharma limited the downside being the top gainer among the index.

Market Movers

Gainers

Asian Paints: Shares rose more than 6% as crude oil prices continue to fall amid BoA-ML upgraded the stock to buy.

Hero Moto Corp: Shares were seen up as the company plans to set up manufacturing plants in Brazil and Argentina.

Losers

NMDC: Shares were top lose after company announced rate cut in iron prices along with fall in November output.

ONGC: Oil producing companies continues to be under pressure as crude oil prices continues to slip down.

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