Thursday, 24 September 2015

Nifty opens below 7850 on F&O expiry day, Sensex weak

Lupin, NTPC, Sun Pharma, Bajaj Auto and HUL are top gainers while ICICI Bank, HDFC, Axis Bank and Tata Steel are major losers in the Sensex.

9:45 am Oil Update: Oil prices edged up today after taking a hit in the previous session in response to a mixed US stockpiles report, but analysts warned that headwinds remained in place for the under-pressure commodity.

Concerns about a slowdown in the global economy, particularly key energy consumer China, combined with an oversupply have seen crude prices tumble more than 60 percent from last year's peaks above USD 100 a barrel.

Prices took another hit yesterday when the US Department of Energy (DoE) said output at home rose 19,000 barrels per day to 9.136 million, snapping a six-week run of lower production.

The news came hours after it was announced that a gauge of factory activity in China had hit a six-and-a-half-year low in September - overshadowing figures showing US commercial crude inventories sank 1.9 million barrels in the week ending September 18. Both main contracts edged up in electronic trade today.

US benchmark West Texas Intermediate was 0.90 percent higher at USD 44.88 a barrel, while Brent crude added 0.67 percent to USD 48.07.

9:30 am Market outlook: Suhas Harinarayanan, JM Financial says until the PSU capex picks up, he expects domestic recovery to remain stuck in the 'early to mid-cycle' stage, given that tepid industrial recovery was led by replacement demand in certain sectors and exports until now."

Based on capex study, he continues to favour retail focused companies and only a few select capex themes in India.

He likes smaller contractors like Ashoka Buildcon & Sadbhav Engineering. In power T&D, he likes Techno Electric and in midcap cement, he likes JK Lakshmi Cement.

Don't miss: Edelweiss bets on Wonderla but frowns on footfall growth

The market has opened weak on September F&O expiry day. The Sensex is down 71.40 points or 0.3 percent at 25751.59 and the Nifty slips 10.45 points or 0.1 percent at 7835.50. About 267 shares have advanced, 160 shares declined, and 29 shares are unchanged.

Lupin, NTPC, Sun Pharma, Bajaj Auto and HUL are top gainers while ICICI Bank, HDFC, Axis Bank and Tata Steel are major losers in the Sensex.

The Indian rupee has extended its fall in early trade on weakness in global equities. The currency has opened at 66.20 a dollar, down 23 paise or 0.34 percent compared to 65.97 a dollar in previous session.

Mohan Shenoi, Kotak Mahindra Bank says Federal Reserve not hiking rates initially triggered global risk-on rally. But likely Fed lift-off in December, weak China PMI and Volkswagen crisis has reversed sentiment back to risk-off, he adds.

According to him, safe-haven buying has helped the dollar rally. The rupee has been resilient with RBI presence on both sides, he feels.

Meanwhile, Asian shares got off to a cautious start after more dour economic news in China and the United States prompted a bruising selloff the previous day.

Worries that an eventual tightening in US monetary policy and slower growth in China could knock the global economy have scared off investors, particularly those invested in stocks and commodities. Japan's Nikkei average, opening for the first time since Friday after national holidays, tumbled 1.6 percent, edging near its seven-month low touched earlier this year.

Wall Street also lost ground on Wednesday, dragged down by economic reports portraying US factory growth as tepid and China in its worst manufacturing contraction since the global financial crisis.


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