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

Nifty closes higher on expiry; global markets weak on Fed

“January F&O expiry induced significant volatility today on benchmark indices with Nifty closing higher in spite of weal global markets and negative breadth. US Fed remained upbeat on economic growth and improvement in labour markets though inflation expectations were closely watched. This view suggested that Fed may go for policy normalization this year on data driven approach. Equity markets witnessed sharp profit taking yesterday with Wall Street closing in red. European and Asian markets also remained weak with Greek condition in focus. Public banks dragged Nifty while private banks also traded mostly weak. The profit taking was seen ahead of RBI rate policy and as investors remained cautious on F&O expiry. Pharma and realty stocks rallied lifting the index. ”, Mr. Kiran Kumar Kavikondala said.

Other Asian Markets

Asian markets remained weak today after Fed statement raised fears of sooner normalization in US monetary policy. Outflows and profit taking was seen. While Situation in Greece and austerity measures along with US GDP data was awaited by investors. Most currencies remained under pressure against USD.

Commodity Outlook:

Commodity Market was very volatile in the morning session; Gold and Silver Prices dipped in the morning session on profit taking and strong dollar; Crude Oil continued to slip in the morning session after bearish US supply data while Natural Gas surged more than 4% due to snowfall in parts of USA; Base Metals remained weak in the morning session due to weak demand in China and global supply concerns.

Evening outlook:

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

Currency

USDINR opened higher and remained on upward trajectory as US Fed presented a strong view of strength in economy raising fears of earlier rate hike. US 10 year yields rallied though and USD remained strong against major world currencies as suggested by strength in USD Index. Profit taking in equity markets and volatility due to January F&O weakened Dollar inflows keeping Rupee under pressure.  Euro also witnessed strength against the dollar after the Greece election. Unemployment rate in euro zone and US GDP data was eyed for cues on USD. Also, RBI policy statement will be next big cue for Indian Rupee.

Stock Recommendations:

Sun Pharma - Buy at Rs.919.80(CMP); Target -Rs.930.00; Stop Loss –Rs.910.00

Ashok Leyland- Sell at Rs.65.95(CMP); Target -Rs.65.00; Stop Loss –Rs.66.80

ONGC – Buy at Rs.351.90(CMP); Target -Rs.356.00; Stop Loss –Rs.349.00

Sectors Snapshot

Bank Nifty: Bank Nifty rose marginally lifted by HDFC bank while most banks traded under pressure and dragging the index. Public banks fell on fears over US Fed may hike rate sooner, also RBI policy remained in focus with investors taking profit off table. Weakness in Rupee followed outflows in banking today.

CNX IT: IT stocks also traded mixed today though weakness in Rupee supported large cap stocks but investors were seen taking profit in a weak market. Major stocks failed to lift index while mid caps saw mixed momentum today. Greek situation and economic growth in Euro zone likely to provide cues to IT in coming days.

CNX Energy: Energy Sector gained over 100 points in the session today despite fall in Crude Oil Prices; OMCs, BPCL and IOC, lifted the index gained over 3% each while Reliance also rallied 2.5% in the session today.

CNX Pharma: Index opened marginally up and traded with positive sentiments as rupee was seen weakening. While Dr. Reddy's posted robust results which gave boost to the other stocks of the index. Stock gained over 3.5% followed by Aurobindo Pharma.

Market Movers

Gainers

BPCL: Shares continued to rise as the company plans to raise $2 billion through medium-term notes to finance its capex initiatives.

Dr. Reddy's: Shares of the company rose after company released their Q3 earnings which were seen better than street view. Net profit declined 7% on year to 5.74 billion rupees.

Losers

PNB: Profit taking was seen under banking space due to rally after RBI rate cut. PNB was the top loser falling over 3%.

Asian Paints: Shares were trading weak in today's session after weak results were posted by the company which were below estimates.

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