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

Nifty weakens further; lows oil prices weigh, CPI and IIP eyed

“Indian markets witnessed negative momentum yet again after Nifty opening higher. The weakness was seen as a result of weak Chinese industrial production data which came at 7.2% fuelling further hopes of PBOC stimulus. European markets witnessed sharp sell off as mining and oil stocks fell on account of weakness in oil. Positive closing on Wall Street i9n previous session and passing of US spending bill helped Nifty to hover above 8300 initially but in late session it witnessed sell off. The index was dragged by energy, IT and metals. Energy stocks continued to weigh as oil fell below $60. Conflict between states and centre on GST bill also kept sentiment negative. Weakness in currency weighed on banking stocks. Important IIP and CPI data which is expected later today will give further direction to markets.” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian markets witnessed negative momentum yet again after Nifty opening higher. The weakness was seen as a result of weak Chinese industrial production data which came at 7.2% fuelling further hopes of PBOC stimulus. European markets witnessed sharp sell off as mining and oil stocks fell on account of weakness in oil. Positive closing on Wall Street i9n previous session and passing of US spending bill helped Nifty to hover above 8300 initially but in late session it witnessed sell off. The index was dragged by energy, IT and metals. Energy stocks continued to weigh as oil fell below $60. Conflict between states and centre on GST bill also kept sentiment negative. Weakness in currency weighed on banking stocks. Important IIP and CPI data which is expected later today will give further direction to markets.

Other Asian Markets

Asian indices closed in green today tracking some strength on Wall Street and as US govt. passed spending bill avoiding a shut down. Another factor that investors awaited was more stimulus from PBOC as China’s industrial production for month of November came in at 7.2%. Nikkei gained as Yen weakened amid rally in USD ahead of Fed decision.  Nikkei closed higher by 0.66%. Other major indices also traded flat to positive in today’s session. Falling oil prices continued to weigh on market sentiment.

Commodity Outlook:

Commodity Market showed moderate volatility in the morning session. Gold and silver prices traded flat in the morning session as dollar showed signs of recovery. Crude oil continued to fall in the morning session on supply concerns while natural gas prices showed strength after bullish US supply report. Base metals remained weak in the morning session after soft Chinese data and weak equity markets.

Evening outlook:

Gold and silver prices are expected to be range bound in the evening session; Crude oil and natural gas are expected to show signs of recovery while base metals could continue to trade weak in the evening session.

Stock Recommendations:

Cipla - Sell at Rs.640.90(CMP); Target - Rs.633.00; Stop Loss – Rs.646.00

State Bank of India - Buy at Rs.311.35(CMP); Target - Rs.320.50; Stop Loss – Rs.305.00

Sun Pharma - Buy at Rs.843.35(CMP); Target - Rs.855.00; Stop Loss – Rs.835.00

Sectors Snapshot

Bank Nifty – Bank Nifty was weighed by the weakness in other sectors. Global markets also remained unsupportive but banks cut losses and had limited fall. The important reason for this being govt.’s approval to reduce its stake in PSBs. Also, cooling domestic inflation data and decent IIP number expectations helped banks to witness limited losses.

CNX IT: IT stocks opened higher ion back of weakening Rupee but as day progressed Rupee cut losses and IT index gradually witnessed profit taking. CNX IT also witnessed limited losses as US tech stocks closed in positive as suggested by strong close in NASDAQ.

CNX Energy: Energy sector lost further 200 points in the trading session today. ONGC and Cairn India continued to fall due to weak crude oil prices while trading volumes remained low in other stocks as well. BPCL was the only gainer in the sector gaining around 1%.

CNX Pharma: Pharma index witnessed another volatile session. The stocks rose gaining from positive cues from Asian markets, but gave up gains as govt. capped prices of 52 more drugs. The index gave up in most of its gains in late session. USDINR resisting 62.5 also kept investors cautious on pharma stocks.

Market Movers

Gainers

Bharti Airtel: Shares were seen falling in past session after SC reserved order on Bharti Mittal, Essar Ruia plea on 2G spectrum. Buying was seen at lower levels today.

Ambuja Cement: The stock witnessed some buying post recent sell off after the co cut cement prices by 5-20 Rupees per bag.

Losers

GAIL: Energy sector traded under pressure. Shares of GAIL India fell for the seventh straight session as crude oil slipped below $60 a barrel.

TATA Steel: Shares continue to slip as closure of iron ore mines in Jharkhand and Odisha has led company to buy iron ore keeping prices under pressure.

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