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WealthRays Securities Source Name: WealthRays Securities

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

Dec 09, 2014   17:28 IST 
India

Nifty slips below 8350; profit taking continues

 

 Equity markets witnessed a volatile session today with major factors such as slowdown in China and sharp sell of major Asian markets weighing on benchmark index. Selling continued with weakness from banking stocks and metals and power stocks. Negative close on Wall Street also weighed on the sentiment with Europe trading in deep red. US FOMC policy decision later this month was eyed by investors which kept participants cautious. Consistent fall in oil prices weighed on energy stocks. Risk of default in Venezuela kept sentiment negative. Domestically CPI and IIP data was eyed by the investors which is expected to set momentum for RBI policy decision next year and a possible rate cut cycle. Pick up in manufacturing was eyed by investors.” , Mr. Kiran Kumar Kavikondala said.

 

Indian Markets

Equity markets witnessed a volatile session today with major factors such as slowdown in China and sharp sell of major Asian markets weighing on benchmark index. Selling continued with weakness from banking stocks and metals and power stocks. Negative close on Wall Street also weighed on the sentiment with Europe trading in deep red. US FOMC policy decision later this month was eyed by investors which kept participants cautious. Consistent fall in oil prices weighed on energy stocks. Risk of default in Venezuela kept sentiment negative. Domestically CPI and IIP data was eyed by the investors which is expected to set momentum for RBI policy decision next year and a possible rate cut cycle. Pick up in manufacturing was eyed by investors.

 

Other Asian Markets

Following weak close on Wall Street, Asian indices closed saw sharp profit booking and closed in red. Yuan witnessed heavy sell off and weakened against the greenback. Hopes of stimulus by PBOC lifted the index while investors exited the markets on account of slowdown and steep fall in global oil prices. Nikkei followed weak momentum on European markets, though ECB stimulus hopes remained.   HSI reversed initial gains and succumbed to heavy profit taking.

 

Commodity Outlook:

Commodity Market traded mixed in the morning session. Gold and Silver Prices showed strength in the morning session as Equity markets routed which turned Investors’ focus towards them. Crude Oil Prices continued to dip in the morning session due to global supply concerns while Natural Gas Prices rose due to bargain hunting at lower levels by Investors. Base Metals traded on a weak note in the morning session as Equity Markets dipped with Shanghai Index falling more than 5%.

 

Evening outlook:

G Gold and Silver Prices could remain strong in the Evening session; Crude Oil and Natural Gas prices are expected to rebound in the Evening session while Base metals could continue to look weak.

 

Stock Recommendations:

Tata Power – Buy at Rs.85.40(CMP); Target - Rs.86.50; Stop Loss – Rs.84.50

 

Federal Bank - Sell at Rs.138.25(CMP); Target - Rs.136.50; Stop Loss – Rs.139.50

 

Asian paints - Sell at Rs.781.8(CMP); Target - Rs.774.00; Stop Loss – Rs.790.00

 

Sectors Snapshot

Bank Nifty – Banking stocks were down for second consecutive session on back of weakness in Indian currency and inflow of funds in commodities such as gold and base metals. Selling was seen in Bank Nifty as inflation data expected next week made investors book profits.

 

CNX IT: The overall breadth in major IT stocks was mixed post sharp fall in Infosys in previous session. Weakness in Rupee supported export led IT stocks while weakness in global tech index NASDAQ kept the momentum negative.

 

CNX Energy: Energy sector lost over 150 points in the session today as fall in global crude prices affected investors’ sentiment with ONGC leading the fall losing more than 4% in the session today. IOC was the only stock which was trading in green in the sector which gained from the fall in crude prices.

 

CNX Pharma: Index opened higher today but could not sustain the gains; profit taking was seen with major indices falling over 1%. Sun Pharma and Ranbaxy were major gainers as CCI approves the merger of the two companies.

 

Market Movers

Gainers

Sun Pharma: Shares were up by 1.41% on news that Competition Commission of India has approved the merger of Ranbaxy with Sun Pharma.

 

M&M: Shares rose on account of buying at lower levels after profit booking which was seen in previous session. Auto sector is seen firm ahead of sales momentum.

 

Losers

SSLT: Metals space was seen down ahead of expectation of lowest iron ore output for November. SSLT was the major hit in today's session.

 

ONGC: The stock continued to slip and hit seven month low due to continued fall in oil and Brent prices with energy space falling by 1.74%.

 

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