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Nifty Outlook

Markets swung both ways and finally ended with a cut of more than a percent. The benchmark witnessed gap up opening on the back of positive global cues as the US Fed kept the interest rate unchanged and maintained the dovish stance, which boosted the investors’ sentiment. However, the gains fizzled in the latter half, citing profit-taking in the global markets and continuous rise in the COVID cases. Consequently, the Nifty ended at 14,558 levels, down by 1.1%. The broader markets too ended with losses in the range of 1.1-1.5%. On the sector front, barring FMCG and telecom, all the other indices ended with losses wherein IT, healthcare and realty were the top losers.

With all the major events behind us, global cues and COVID updates will dictate the trend. Nifty tested the critical support at 14,500 today and its breakdown will pave the way for further decline. Traders should maintain extra caution and limit leveraged positions.

News

*Escorts has informed that it has achieved the landmark sales of 1,00,000 tractors in the ongoing fiscal year i.e. FY21.

*Welspun Corp announced that it has bagged multiple orders of ~93 kilometric tonnes worth Rs 777cr in the overseas and domestic markets.

*Adani Green Energy raised a USD 1.35bn debt package for its under-construction renewable asset portfolio through definitive agreements signed with a group of leading international lenders.

Derivative Ideas

TORNTPOWER FUTS added around 5% in open interest addition as long buildup was seen in it till closing time. Current chart pattern also indicates further up move in its price. We suggest buying TORNTPOWER in cash as per below levels

Strategy:- BUY TORNTPOWER in cash between 415-416 stoploss at 410, target 425.

Investment Pick - Kansai Nerolac Paints Ltd

Established in 1920, Kansai Nerolac Paints Limited (KNPL) is a subsidiary of Kansai Paint Co. Ltd., Japan. It is the second largest coating company in India and a market leader in Industrial Coatings. KNPL has well established products in both the decorative and industrial segments. It has pan-India presence with 6 manufacturing plants, 104 depots and 27,500+ customer network. In international markets it expanded in Nepal, Bangladesh and Sri-lanka.

Going ahead, its strategy is to grow in both segments as well as gain market share from unorganised players on the back of positive sector trends, innovative products, focus on non-auto segments, increase distribution network and expand in newer geographies and in semi-urban and rural areas. Moreover its recent foray into adhesives and construction chemicals segment would aid benefits in the coming quarters. We have a positive view on KNPL hence we are initiating with a Buy rating on the stock with a target price of Rs. 705.

Buy Kansai Nerolac Paints Ltd @ 9-12 Months CMP 539.4  TGT 705

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