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Friday 17 April 2015

Sensex, Nifty continue to struggle; banks, IT drag

01:45pm Crude falls: Brent crude oil prices fell today, ending a run of rallies earlier in the week, after OPEC said that its output surged in March, adding to a global glut.

The Organization of the Petroleum Exporting Countries (OPEC) said that its March production jumped 810,000 barrels per day (bpd) to 30.79 million bpd, which is equivalent to a third of global supply.

"It seems Saudi Arabia has not had enough of low oil prices," Singapore-based Phillip Futures said.

01:20pm Gold Update: Gold firmed near USD 1,200 an ounce today but the metal was headed for its second straight weekly drop, weighed down by uncertainty over the timing of an interest rate increase by the US Federal Reserve.

Spot gold edged up to USD 1,200.80 an ounce by 0701 GMT after dropping 0.3 percent on Thursday. The metal has lost 0.6 percent this week.

Expectations that the US central bank would start raising rates in June have been reassessed after recent sluggishness in US economic data and many are now betting that policy will not be tightened until September

Strong data could still prompt the US central bank to raise rates sooner, which would dent demand for bullion, and the uncertainty has led to caution in bullion markets.

However, gold failed to benefit from weak data on Thursday on US housing starts and factory activity in the mid-Atlantic region, nor from a resulting drop in the dollar.

01:00pm Market Check

The market is still under pressure with the Nifty struggling below 8650. The 50-share index is down 59.60 points or 0.7 percent at 8647.10. The Sensex is down 97.10 points at 28568.94. About 1234 shares have advanced, 1374 shares declined, and 177 shares are unchanged.

Sesa Sterlite, Tata Steel, Hindalco, BHEL and NTPC are major gainers in the Sensex. Among the losers are TCS, Sun Pharma, Wipro, Bharti Airtel and GAIL.

IT stocks are dragging the market while  Gautam Chhaochharia, Head of India Research, UBS says more negative surprises could be in store in the sector.

The brokerage has lowered its December 2015 target for Nifty to 9200 from 9600 and Chhaochharia said the reality of slow recovery was now being acknowledged by the market. UBS has cut earnings estimates for Nifty companies in FY16 by 6-7 percentage points over the last six months, and now expects a 10 percent earnings growth this year and 18 percent growth next year. He said the rural slowdown was worse than expected and urban consumption also could disappointment. For More information Please visit this site www.bigprofitbuzz.com


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