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Nifty Outlook

The bulls took control over the markets once again, after spending over a week in a consolidation range which helped the index to gain nearly a percent. After the flat start, the benchmark inched higher gradually as the day progressed led by healthy buying in sectors such as IT, PSU banks and energy. Consequently, the Nifty hit a new record high of 17,500 and ended higher by 0.8% to settle at 17,520 levels. On the sector front, except the media, all the indices ended in green. The broader indices too ended in a positive range of 0.7-1%.

The recent macroeconomic data and encouraging pace of vaccination drive have boosted sentiment domestically and helped the markets to inch higher. However, cues are mixed from the global front so we suggest a check on overnight trades. On the index front, Nifty would find support around 17,400 in case of any dip. On the higher side, a decisive close above 17,550 would pave the way for 17,650+ levels.

News

* HCL Technologies and Finastra, (the largest pure-play software vendor that serves the entire financial services industry), have expanded their partnership to drive digital transformation across South Korea and Taiwan.

* Cyient has expanded its Digital Solutions portfolio for the Aerospace industry with its global AS9145 Supplier PPAP platform.

* KNR Constructions gets letter of acceptance for HAM project worth Rs 1,041.5cr. The work includes development of six lane Chittor-Thatchur highway on Flybrid Annuity Mode under Bharatmala pariyojana, in the State of Andhra Pradesh and Tamil Nadu.

Derivative Ideas 

NIFTY FUT shed around 4% in open interest in as fresh long build up was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in NIFTY 17550 CALL OPTION as per below levels.

Strategy:- BUY NIFTY 17550 CE@10-15, SLOSS AT 1, TRGT 30

Investment Pick - Phillips Carbon Black Ltd.

Established in 1960, Phillips Carbon Black Ltd (PCBL) is an integral part of the RP-Sanjiv Goenka Group. Over the decades, they have built scale, expanded global footprint and set up world-class R&D facilities to address diverse customer requirements. At present, they are the largest carbon black manufacturer in India with 603,000 MT of annual production capacity. Also, it has four strategically located state-of-the-art plants at Durgapur (West Bengal), Palej & Mundra (Gujarat) and Kochi (Kerala) along with R&D Centre in Asia and Innovation Centre in Europe. Further, PCBL is a strong global player with a significant customer base in 45+ countries and offices in Japan, Germany, Belgium, China, South Korea and Vietnam.

PCBL is a leader in carbon black having a strong presence in India as well as globally. The company’s products, i.e. carbon black and speciality black, demand is likely to be driven by increase in global demand, the focus of the Indian government on the manufacturing sector and recovery in the automobile sector. In addition, its focus on manufacturing high-performance new grades products, improving operating efficiency and increasing specialty black portfolio across inks, coatings and paints segments will further drive growth. We have a positive outlook on the company from the long term perspective and have initiated a ‘Buy’ on the stock with a target price of Rs 306.

Buy - Phillips Carbon Black Ltd @ 9-12 Months CMP 250.25 TGT 306

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