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

Nifty closes more than 1% down; Profit taking affects momentum

“ Equity market witnessed negative momentum today with benchmark breaking 8500 and closing down at lowest point of the day. The weakness was seen as investors became cautious ahead of IIP and CPI numbers expected next week. Weak Chinese data also dragged the index while expectation of monetary easing by PBOC directed flows to Chinese markets. Globally, US posted strong jobs data for month of November which triggered fears of hawkish tone by Fed in Dec policy meet. Considering all these factors profit taking was seen at higher levels in banking and IT stock with metal stocks also remaining weak. Fund flows were seen directed towards defensive counters such as ITC which supported the index. Along with this pharma stocks also witnessed inflows” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Equity market witnessed negative momentum today with benchmark breaking 8500 and closing down at lowest point of the day. The weakness was seen as investors became cautious ahead of IIP and CPI numbers expected next week. Weak Chinese data also dragged the index while expectation of monetary easing by PBOC directed flows to Chinese markets. Globally, US posted strong jobs data for month of November which triggered fears of hawkish tone by Fed in Dec policy meet. Considering all these factors profit taking was seen at higher levels in banking and IT stock with metal stocks also remaining weak. Fund flows were seen directed towards defensive counters such as ITC which supported the index. Along with this pharma stocks also witnessed inflows.

Other Asian Markets

Asian Markets closed mixed in a subdued session as Feds policy decision next week later this month remained in focus. While indices cut losses and closed slightly in green, Chinese data showed that November export and import fell suggesting slowdown in China. Nikkei was supported by   weakness in Yen which lifted export stocks. SSE composite rallied as more stimulus was expected from China’s central bank. SSE composite closed above 3000 levels attracting FII investments.

Commodity Outlook:

Commodity Market traded on a mixed note in the morning session. Gold and Silver Prices showed strength in the morning session but their upper side continued to remain limited on strong dollar. Crude Oil continued to rout in the morning session on supply concerns while Natural Gas Prices also remained weak due to uncertainty over weather forecasts in USA. Base Metals remained weak in the morning session as China’s trade data disappointed.

Evening outlook:

Gold and Silver are expected to remain range bound in the Evening session; Crude Oil Prices are expected to remain weak while Natural Gas is expected to rebound in Evening session; Base Metals could trade sideways in the Evening session

Stock Recommendations:

Apollo Hospitals - Sell at Rs.1151.05(CMP); Target – Rs.1138.00; Stop Loss –Rs.1162.00

Reliance Industries – Buy at Rs.944.60(CMP); Target –Rs.955.00; Stop Loss –Rs.934.00

TVS - Sell at Rs.245.55(CMP); Target –Rs.243.00; Stop Loss –Rs.248.00

Sectors Snapshot

Bank Nifty – Bank Nifty also witness profit booking but held 18,500 mark on closing. PSU banks were major losers dragging the benchmark. Main reason keeping banking under pressure was strong US jobs data which suggested Fed’s hawkish tone this month, continued weakness in Rupee and weak Chinese trade data. Domestic CPI and IIP data also triggered caution amongst investors.

CNX IT: IT index lost more than 3% today as major IT cos dragged the benchmark. The sell off was seen as part of profit booking after recent up move and narrow range of Rupee which failed to provide any cues. Also, slowdown in Europe and China were important reasons for investors exiting IT stocks today.

CNX Energy: Energy Sector lost over 70 points in the trading session today. All constituents expect ONGC was seen trading in negative in the sector. Cairn India fell further 2% due to fall in Crude Prices while ONGC rebounded slightly due to bargain hunting by Investors. Profit taking continued to affect OMCs.

CNX Pharma: Index was hit by profit booking in today's session, major stocks in the index were seen down. Aurobindo Pharma limited the downside by gaining more than 3% as company completes acquisition of Natrol. Dr. Reddy's continue to slip further losing 2.36% today.

Market Movers

Gainers

ITC: Shares have kept on rising after the ban on loose cigarettes was kept on hold. As the markets were hit by profit taking in today's session, FMCG sector was seen gaining making ITC as second top gainer.

Coal India: Shares were up on media reports that the company has requested govt. to re-allot the two coal blocks which it had lost on SC's order.

Losers

Infosys: Shares prices were seen down as the promoters of the company sold 2.8% of the stake of the company.

Sesa Sterlite: Shares were seen down as Bank of America Merrill Lynch has cut its earnings estimates of the company and also the price target on falling crude.

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