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WealthRays Securities Source Name: WealthRays Securities

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

Dec 30, 2014   17:36 IST 
India

Indices end flat tracking global cues, energy and metals drag

Indices end flat tracking global cues, energy and metals drag Indian equity markets traded with negative bias for most of the session but benchmark indices made a smart recovery in last hour of the session. The index was dragged by metal stocks as Chinese markets was a sell off and painted a gloomy picture of economy. Worries on Greece snap election kept European markets under pressure leading to a negative sentiment for equities. Positive reforms on Land Acquisition Act by govt. yesterday and Dollar rally taking a pause lifted banking and infra stocks. IT also saw inflows in a weak market supporting the benchmark. Nifty took strong support at 8220 and closed marginally higher. Weak global oil prices dragged energy stocks while defensives such as Pharma also saw inflows. PMI manufacturing data later this week was eyed by the market participants.

 

Indian Markets

Indian equity markets traded with negative bias for most of the session but benchmark indices made a smart recovery in last hour of the session. The index was dragged by metal stocks as Chinese markets was a sell off and painted a gloomy picture of economy. Worries on Greece snap election kept European markets under pressure leading to a negative sentiment for equities. Positive reforms on Land Acquisition Act by govt. yesterday and Dollar rally taking a pause lifted banking and infra stocks. IT also saw inflows in a weak market supporting the benchmark. Nifty took strong support at 8220 and closed marginally higher. Weak global oil prices dragged energy stocks while defensives such as Pharma also saw inflows. PMI manufacturing data later this week was eyed by the market participants.

 

Currency:

Rupee showed strength today after consistent weakness in previous sessions. FII flows remained negative for this month keeping currency under pressure. Possible RBI intervention to stem Rupee fall could be expected which brought USDINR pair at lower levels today. Further USD index showed strength with major currencies strengthening against the greenback. Inflows were seen directed to US treasuries as safe with bonds yields falling to 2.021% in US. Profit taking by exporters was also seen in USDINR pair strengthening Indian Rupee. GOI 10 year yields were down on expectations of a RBI rate cute early next year keeping downward pressure on Rupee.

 

Other Asian Markets

Asian market witnessed sharp profit taking after previous positive sessions today. Nikkei lost more than a percent on Greece worries and as global oil prices continued to fall to five year lows. Also, major manufacturing PMI data was eyed by investors to check strength in China. China PMI is expected later this week. Yen showed strength which also kept markets under pressure.

 

Sectors Snapshot

Bank Nifty: Banking stocks made a smart recovery in late hours of the session lifting Bank Nifty. The rise was seen on back of strong recovery in Rupee form elevated levels and positive reforms by the govt. taken yesterday on Land acquisition Act. Global factors such as Greece worried kept Banks under pressure during the session though.

 

CNX IT: IT index opened higher and remained in a narrow range registering mild gains. IT stocks were up as Rupee continued to remained near 63.5. Late recovery in markets led to inflows in major IT stocks late hours of the session.

 

CNX Energy: Energy Sector lost over 80 points in the session today as global Crude Oil prices resumed its slide to hit fresh 5 year lows; ONGC, Cairn India and RIL fell over a percent in the session today while OMCs, BPCL and IOC, lent the sector some support.

 

CNX Pharma: Index opened higher today tracking positive global cues. However trading was flat due to mixed global concerns. Index managed to close in green supported by Aurobindo Pharma and Divi's Lab. Shares of Divi's lab gained after the company clarified on the news report yesterday. Glenmark Pharma was the top loser among the index.

 

Commodity Outlook:

Commodity Market showed moderate volatility in the morning session. Gold and Silver Prices showed strength due to uncertain Equity Markets but strong dollar kept their upside limited. Crude Oil continued to slide in the morning session as supply concerns weighed while Natural Gas Prices stayed weak after the rally yesterday. Base Metal Prices traded under pressure in the morning session as weak equity markets weighed on their prices.

 

Outlook for Evening session: Gold and Silver Prices are expected to remain range bond in the Evening session; Crude Oil and Natural Gas Prices could rebound slightly while Base Metals could stay weak.

 

Stock Recommendations:

ICICI Bank - Buy at Rs. 350.25(CMP); Target –Rs. 355.00; Stop Loss –Rs. 346.00

 

IOCL - Buy at Rs. 332.50(CMP); Target –Rs. 336.50; Stop Loss –Rs. 329.00

 

Sun Pharma - Sell at Rs. 820.40(CMP); Target –Rs. 812.00; Stop Loss –Rs. 828.50

 

Market Movers

Gainers

BHEL: Shares of the company rose today after the company formed a consortium with Mishra Dhatu Nigam and Hindustan Shipyards to bid Indian Navy's project.

 

DR. Reddy's Lab: Shares rose after the company clarified on the news report "DRL under health Canada Scanner".

 

Losers

Hero Moto Corp: Shares of the company were seen under pressure whether the govt. will further extend the excise duty sops for the ailing sector.

 

Tata Steel: Shares were down after co. said its Oct-Dec profits will be negatively impacted due to the suspension of operation at its blast furnace in Jamshedpur.

 

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