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

“Indian benchmark indices traded in a very narrow mood today post RBI policy yesterday. Rupee also, was in a narrow range as mixed cues for currency were seen. Globally Dollar gained strength but USDINR pair could not break 62 as RBI did not cut policy rates yesterday and fund flows in equity markets were positive. Nifty was dragged by pharma and IT stocks which showed mixed to negative momentum as Rupee remained stabled. While banking stocks could not provide substantial support to the benchmark as PSBs traded with caution while private banks made some gains. Global cues such as rumors of PBOC’s cut in banks’ reserve requirements provided positive sentiment. RBI’s dovish tone on inflation front also lifted sentiment. As large cap remained range bound, mid cap stocks saw inflow as with Mid cap index closing at record highs”,  Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian equity markets witnessed a lacklustre day post RBI credit policy review. Though dovish tone by the RBI governor on inflation targets were positive for future rate cut, market could not make substantial gains as much of the positivity was already factored in. Nifty took a breather and held 8500 mark. Banking stocks gained led by private banks while public banks were flat. Global cues like rumours of China’s regulatory action and stable currency resisting 62.00 buoyed banking stocks. Mid cap index surprised markets with witnessing inflows and closing at record highs. Metals stocks buoyed by positive sentiment of anticipated China’s accommodative monetary action lifted the benchmark with JSPL rising more than 8%. Pharma stocks saw profit booking dragging the index. Going forward Nifty is seen in a tight range of 8450-8550.

Other Asian Markets

Asian markets traded with bias today with major indices taking positive cues from US economic data and registering gains. Chinese markets gained on rumours that China’s central bank may cut reserve requirements of banks. While HSI saw selling on back of slowing economy and ongoing protests which hurt the investor sentiment. Japan’s Nikkei traded in positive taking positive cues from Wall Street and weakening Yen which gave momentum to export stocks. Australian index ASX also moved marginally higher after weak growth of 0.3% during quarter ended September.

Commodity Outlook:

Commodity Market remained range bound in the morning session. Gold and Silver Prices showed strength but strong dollar continued to keep their upper side limited. Crude Oil showed signs of strength after bullish US supply report while Natural Gas Prices continued to remain at lower levels due to warm weather forecasts over USA. Base Metals made moderate gains in the morning session as strong Equity Markets provided them good support.

Evening outlook:

Gold and Silver Prices could continue to be range bound in the Evening session; Crude Oil and Natural Gas could show signs of rebound while Base metals are expected to trade sideways in the Evening session.

Stock Recommendations:

Aurobindo Pharma - Sell at Rs.1144.75(CMP); Target - Rs.1133.00; Stop Loss – Rs.1156.00

M&M Finance - Buy at Rs.320.35(CMP); Target - Rs.324.00; Stop Loss – Rs.317.00

Punjab Nation Bank - Sell at Rs.1095.40(CMP); Target - Rs.1084.00; Stop Loss – Rs.1107.00

Sectors Snapshot

Bank Nifty: Bank Nifty opened slight higher and maintained 18,500 mark led by gains in privates banks such as Yes Bank and Federal bank. The sentiment was lifted after dovish tone by RBI Governor in credit policy meet yesterday. Also, global cues from China with rumors of stimulus and cut in reserve kept sentiment positive. Public banks traded flat on account of profit taking at higher levels.

CNX IT: IT stocks traded mixed keeping index flat. Major stocks were towards positive side as global tech stocks were strong as reflected by US NASDAQ gaining in previous session. Rupee also did not make significant gains post no cut by RBI previous day. This kept investors from exiting export oriented IT stocks.

CNX Energy: Energy Sector gained over 100 points in the session today. Oil Producers rebounded from lower levels as bullish US supply data provided Crude Oil prices support while OMCs traded under pressure. ONGC was the biggest gainer in the sector gaining over 3%.

CNX Pharma: Due to lack of trigger, Pharma sector traded in a range with a negative bias. Defensives were seen down on account of profit taking, investment was seen flowing in rate sensitive stocks after RBI maintained status quo. Dr. Reddy's was the top loser amongst the index.

Market Movers

Gainers

JSPL: Shares rose over 7% on value buying amid positive sentiments were seen in metal space. Hopes of stimulus from China are driving the sentiments.

ONGC: Shares were up on news that the company has received environmental clearance to drill 103 wells in 30 blocks in Gujarat.

Losers

Dr. Reddy's: Shares fell on account of profit taking by investors. Rate sensitive were seen more inflows than defensive sectors.

HDFC: Stocks were seen falling as company waits for the approval of increase in the foreign investment of up to 74%. The proposal has been taken by CCEA.