The News International Team
11:50 am Market guru: The US Federal Reserve decision will be a key factor for markets – Indian as well as global, says Vibhav Kapoor of IL&FS. If in fact the Fed signals a rate hike, dollar will start strengthening, which is not good for emerging market equities, he says, as it may lead to capital flight. In any case, Kapoor sees limited upside for the market, considering valuations are too rich. Coupled with the Fed move – if it raises rates – the Indian market can go sideways to down in the near-term. According to him, Indian market will start looking attractive once again in the 8200-8300 range. He believes Nifty can trade in the 8000-9000 range over the next few months. He advises investors to reduce weightage on cyclicals and play the defensives – IT and pharma – instead as these sectors are likely to benefit on dollar appreciation. Kapoor does not wish to advocate midcaps at this stage and says large caps will lead the next rally.
11:30 am FII view: The market level today is recalibrating the fact that despite the new government coming in nine months ago, the country’s macroeconomic situation is yet to see a significant turnaround, is the word coming in from Sanjay Sinha, founder, Citrus Advisors. Corporate profits have not seen pick up yet, he says.
On today’s big event, he says if the US Federal Reserve does not raise rates, them the downside on the market gets capped. However, he does not see the Nifty crossing the 9000 mark.
According to Sinha, portfolio should consist of 60 percent cyclical and 40 percent defensive stocks. Pharma and IT sectors should be a part of the defensive portfolio, he says. He also advises investors to buy auto stocks on correction.
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The market is reeling under pressure ahead of Federal Reserve meeting. The Sensex is down 97.46 points at 28638.92 and the Nifty is down 27.85 points at 8695.45. About 1062 shares have advanced, 1115 shares declined, and 170 shares are unchanged.
Sesa Sterlite, JSW Steel and Kalyani Steel are in focus as the environment ministry lifted the three-year ban on Goa mining yesterday. Deutsche Bank says it is a long term positive development for Sesa Sterlite which was one of the major iron ore producers in the state before the restrictions.
Hero Motocorp, SBI, Reliance and Axis Bank are top gainers in the Sensex. Among the losers are NTPC, ONGC, HDFC, HUL and BHEL.
Reliance Infra & Tata Power are in focus as the Maharashtra government has cut electricity rates by 12 percent for Feb 2015 and 19 percent for March 2015. The rates are applicable till MERC approves new rates.
Globally, Asian markets trade mixed mirroring a mixed finish on Wall Street. Brent slips toward USD 53 after us crude stocks rise while gold holds near 4 month lows. The dollar hovers around its 12-year peak.