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

RBI surprises with rate cut, Nifty zooms to touch 8500

“Indian benchmark indices rallied today with Sensex claiming 28000 mark. Banks, auto realty and infra led stock markets today after RBI governor Dr. Rajan cut repo rates by 25 basis points. The reasoning was to spur growth and inflation was seen under control. Banks witnessed huge outflows on back of this and at the same time Rupee strengthened against the greenback lifting financials. Energy stocks were also up as global oil prices rebounded cutting losses. Chinese stocks were up which led to recovery on metal stocks but as base metals remained subdued further up move was seen limited. Huge shorts were seen covered on Nifty while fresh buying was seen in public banks. However Nifty failed to conquer 8500 on closing basis, overall bias remained strong on the index. Global markets were also in positive territory today keeping sentiment positive. ” , Mr. Kiran Kumar Kavikondala said.

Indian Markets

Indian benchmark indices rallied today with Sensex claiming 28000 mark. Banks, auto realty and infra led stock markets today after RBI governor Dr. Rajan cut repo rates by 25 basis points. The reasoning was to spur growth and inflation was seen under control. Banks witnessed huge outflows on back of this and at the same time Rupee strengthened against the greenback lifting financials. Energy stocks were also up as global oil prices rebounded cutting losses. Chinese stocks were up which led to recovery on metal stocks but as base metals remained subdued further up move was seen limited. Huge shorts were seen covered on Nifty while fresh buying was seen in public banks. However Nifty failed to conquer 8500 on closing basis, overall bias remained strong on the index. Global markets were also in positive territory today keeping sentiment positive.

Other Asian Markets

Asian markets rose today as rate cut in India lifted the sentiment. Also, strong recovery was seen in Chinese stocks after previous fall in base metal prices. Oil prices rebounded globally lifting the sentiment in Asian indices. Nikkei rallied more than a percent.

Commodity Outlook:

Commodity Market was very volatile in the morning session; Gold and Silver Prices opened lower and traded weak in the morning session as RBI cut repo rates and focus of Investors turned towards Equities. Crude Oil rebounded in the morning session due to bargain buying while Natural Gas continued to trade positively in the morning session due to chilly weather forecasts in USA. Base Metals traded with upward bias in the morning session as surging Equity Markets provided their prices solid support.

Evening outlook:

Gold and Silver Prices are expected to turn positive in the Evening session; Crude Oil and Natural Gas are expected to retain their gains while Base Metals are also expected to stay strong

Stock Recommendations:

Glenmark Pharma - Sell at Rs.714.9(CMP); Target -Rs.705.00; Stop Loss –Rs.722.00

Cairn India - Buy at Rs. 237.00(CMP); Target -Rs. 240.00; Stop Loss –Rs. 235.00

ONGC - Buy at Rs.346.5(CMP); Target -Rs.350.00; Stop Loss –Rs.343.00

Sectors Snapshot

Bank Nifty: Bank Nifty rallied today on back of surprise rate cut by RBI governor and strength seen in Rupee. Fresh inflows were seen in banking stocks focused to public banks. Overall outlook remained positive with major banks hinting towards their rate cut in near term.

CNX IT: IT index took a breather today but stayed in positive territory ahead of TCS results. Overall outlook for TCS Q3 numbers were weak as compared to Infosys results. Strength in markets kept stock buoyed though with major stocks continuing to witness inflows.

CNX Energy: Energy sector surged over 200 points in the session today thus snapping its 3 day losing streak due to recovery in crude oil Prices globally. All stocks in the sector closed in positive while Power Grid was the biggest gainer in the sector gaining over 5%.

CNX Pharma: Index opened higher due to unexpected rate cut by RBI today and traded in a range to marginally close in green up by 0.50%. Mixed performance was seen amongst the stocks in the sector. Index was supported by Cipla and Dr. Reddy's Lab.

Market Movers

Gainers

DLF: Shares of the company were top gainer in today's session after RBI cut rates unexpectedly today. Repo rate was seen cut by 25 basis points.

HDFC: Rate sensitive stocks were seen gaining in today's session due to RBI rate cut decision. HDFC was seen gaining over 7%.

Losers

Asian Paints: Defensive stocks were seen trading weak in today's session as inflows were seen under rate sensitive stocks. Asian paint was the top loser.

Tech Mahindra: IT stocks were the major underperformers today. Tech Mahindra was one of the losers among the index which closed marginally down.

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