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Market started the week on a feeble note and lost nearly a percent, pressurized by weak global cues. After the gap-down start, the benchmark recovered strongly in the first half however selling pressure reemerged at higher levels which again pushed the index lower as the session progressed. Eventually, the Nifty index closed at 17,393 level; down by 1.1%. The broader indices underperformed wherein both midcap and smallcap lost nearly 2% each. On the sector front, all the other indices, barring FMCG, ended with losses wherein metal, realty and banking were the top losers.

The decline shows nervousness ahead of the US Fed meet and we may see further slide in the Nifty towards the major support around the 17,150-17,250 zone. We recommend keeping a cautious approach and limiting naked leveraged positions. Among the sectors, metal looks weakest while selective stocks from the defensive pack like IT and FMCG are still holding strong. Participants should plan their positions accordingly.

News

* RPP Infra Projects has won new orders worth Rs 157.7 cr including engineering, procurement and construction handicraft centre of Bareilly Haat and Mission.

* TP Saurya Limited (TPSL), a wholly owned subsidiary of Tata Power, received the 'Letter of Intent' from Maharashtra State Power Generation Co. Ltd. for setting up of 250 MW Grid-Connected Solar Photovoltaic Power plant in Maharashtra. The project has been awarded to TPSL through Tariff-based competitive bidding followed by e-Reverse auction.

* Zydus Cadila has received final approval from the USFDA to market Vortioxetine Tablets in the strengths of 5 mg, 10 mg, 20 mg (US RLD: Trintellix Tablets). Vortioxetine is used to treat depression.

Derivative Ideas 

NIFTY FUT has added around 3% in open interest in as fresh short build up was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in NIFTY 17350 PE (23 SEP) as per below levels.

Strategy:- BUY NIFTY 17350 PE BETWEEN 75-80 SL 55 TARGET 125.

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 254.45 TGT 306

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