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Nifty Outlook

Markets ended marginally in the green amid volatility, taking a breather after the recent dip. Initially, the benchmark opened on a firm note following positive global cues. However, continuous profit taking not only capped upside but also trimmed the gains. Finally, Nifty settled with marginal gains of 0.3% to settle at 16,496 levels. The underperformance from broader markets continued as both midcap and smallcap ended lower by 1% and 2% respectively. Amongst the sectors, a mixed trend was witnessed as sectors like IT, telecom, and oil & gas ended with gains whereas auto, realty and metal ended with losses.

Markets are currently dancing to global tunes and we expect this trend to continue in absence of any major domestic event. Besides, the upcoming derivatives expiry of August month contracts and continuous fall in the broader markets would keep the participants on the edge. Amid all, we reiterate our cautious view and suggest keeping positions on both sides. Investors, on the other hand, can consider accumulating stocks that are now available at good bargains.

News

* HCL Technologies announced that it has signed a contract with Munich Re, one of the world's leading reinsurers, to create a next-generation digital workplace for the workforce.

* Steel Strips Wheels has signed an MOU for close to USD 105 million from Western Hemisphere which would cover supply of Steel and Aluminum wheels for a minimum period of 3 years.

* Zydus Cadila gets final approval from USFDA to market Tofacitinib extended-release tablets, used to treat rheumatoid arthritis, in the American market.

Derivative Ideas 

TECHM FUTS added around 12% in open interest in as LONG buildup was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in TECHM as per below levels.

Strategy:- BUY TECHM BETWEEN 1400-1405 SL 1375 TARGET 1460.

Investment Pick - Nippon Life India Asset Management Ltd.

Incorporated in 1995, Nippon Life Asset Management Company (NAM) is one of the leading AMCs in India with a total AUM of ~Rs. 3.79 tn. It is involved in managing the mutual fund (AUM of Rs. 2,442 bn) and managed accounts including Portfolio Management Services (PMS), Alternate Investment Funds (AIF), Pension Funds and Offshore Funds.

We continue to remain constructive on the Indian mutual fund industry given its low penetration level as compared to major economies (11% AUM to GDP ratio v/s world average of 62%). Further, NAM’s consistent increase in equity assets, industry-leading retail assets, focus on growing SIP book and strong presence in B-30 cities augurs well for the growth prospects of the company. We recommend a Buy on the stock with a target price of Rs. 492.

Buy Nippon Life India Asset Management Ltd @ 9-12 Months CMP 389.05 TGT 492

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