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

Nifty volatile ahead of Jan F&O expiry and Fed interest rate decision

“Indian benchmark indices opened weak in today’s session led by weak close in US markets. However trend was seen reversing and positive sentiments continued in banking and IT shares as further rate cut expectation is seen by RBI. Realty and consumer durables companies supported the indices in morning session. However, profit taking was seen in later part of the session ahead of the Fed decision policy. Euro markets were seen choppy which weighed on the domestic indices. Rupee was seen gaining strength due to sale of dollars by the banks while IT was the top performer in today’s session. Metal space dragged Nifty down while Adani Port was down over 1.5% due to disappointing Q3 earnings. Indices also traded weak ahead of Jan F&O contract expiry as investors rolled over their positions.” , Mr. Kiran Kumar Kavikondala said.

Other Asian Markets

Asian markets opened weak tracking negative global cues but however erased losses during the session ahead of Fed policy decision. Trade was seen choppy ahead of the policy decision meeting. Chinese markets continued to show weakness for straight two sessions after data showed December industrial profits falling. KOSPI hit seven week high gaining 0.47% in today’s session.

Commodity Outlook:

Commodity Markets was very flat in the morning session; Gold and Silver Prices were weak in the morning session on higher Equity Markets and profit taking; Crude Oil continued to stay at lower levels as supply concerns continue to weigh while Natural Gas also dipped in the morning session as production levels continue to hamper its progress; Base Metals rebounded in the morning but its upside was kept limited due to weak demand in China

Evening outlook:

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

Currency

USDINR opened low due to fall in US markets in previous sessions and weak early trade in Asian markets. Rupee gained in later part of the session as traders were seen cautious ahead of the Fed policy decision and Asian markets ended in positive. Recovery was seen on selling of dollars by banks and exporters tracking heavy foreign capital inflows into equity market thereby restricting sharp downside. Strength in USD index was seen weakening while major Asian currencies were seen trading strong against greenback which provided strength to Rupee.

Stock Recommendations:

Cairn India - Buy at Rs.235.7(CMP) ; Target – Rs.239.00; Stop loss – 233.00

HDFC Bank - Buy at Rs.1058.35(CMP); Target -Rs.1070.00; Stop Loss –Rs.1047.00

EID Parry – Buy at Rs.189.65(CMP); Target -Rs.192.00; Stop Loss –Rs.187.50

Sectors Snapshot

Bank Nifty: Bank Nifty surged over 300 points in the morning session before ending lower as Profit taking dragged the Index. Sentiment remains positive in the sector with private banks set for further gains in the coming sessions. Kotak Bank was the major loser falling over 2.5%.

CNX IT: Index opened up today and traded with positive sentiments tracking fall in US markets. Index was seen up around 1% led by HCL tech as the major gainer ahead of positive earnings to be posted by the company. Further positive trade in rupee kept the upside limited.

CNX Energy: Energy Sector gained nearly 100 points in the session today due to bargain buying by Investors at lower levels. BPCL, IOC and Reliance surged over 2% each while Cairn India dragged the index losing over a percent.

CNX Pharma: Pharma index opened flat due to inflows in cyclical stocks and continued to trade in a narrow range. Rupee was seen gaining strength which weighed pressure on pharma index while Sun Pharma and Ranbaxy were seen trading weak due to weak Ranbaxy’s earnings.

Market Movers

Gainers

DLF: Shares of the company rose on account positive sentiments within the market participants after Obama visit to India.

HCL Tech: Shares were seen rising in today’s session over 2.5% ahead of expectation of better earnings Q-o-Q.

Losers

Bharti Airtel: Profit taking was seen today after stock rose for six consecutive sessions after Credit Suisse upgraded the stock.

SSLT: Shares fell over 3% on expectation of weaker Q3 earnings to be posted by the company tomorrow.

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