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Nifty Outlook

Markets started the week with nearly half a percent cut, pressurised by weak global cues. After the sharp gap down in early trades, the Nifty index gradually pared losses, thanks to the rebound in heavyweights from across sectors. However, profit taking around the 17,300 zone capped the upside and it finally settled at the 17,241 level. While most of the sectoral indices traded mixed, a rebound in the IT pack ahead of the TCS numbers was the major highlight.

Markets are showing tremendous resilience amid the weak global environment however traders are facing tough times due to intermediate volatility. And, now with the beginning of the earnings season, we expect the choppiness to remain high. On the index front, Nifty can extend the rebound if it manages to reclaim 17,400 else consolidation will continue. Meanwhile, we feel participants should maintain their focus more on risk management and limit the leveraged positions.

News

* TCS announced its Q2-FY23 results with its revenue at Rs. 55,309 Cr, growth of 4.8% QoQ. Its EBIT came in at Rs.13,279 Cr and EBIT margins of 24.00%. Attrition rate for the quarter was 21.5% as against 19.7% in the previous quarter.

* Tata Motors Group global wholesales in Q2-FY23, including Jaguar Land Rover, were at 3,35,976 nos., higher by 33%, as compared to Q2-FY22. However, Jaguar Land Rover retail sales decline by 4.9%.. The company said lower-than-expected supply of specialised chips from one supplier for failing to meet its target.

* JSW Steel registers sequential decline of 3% of production. It produced 5.68 Million in Q2-FY23 compared to 5.88 Million in Q1-FY23. This drop in production was attributable mainly to extended maintenance shutdown in JSW Ispat Special Products, subdued market conditions in US and lower capacity utilisation in other locations in India.

Derivative Ideas

NIFTY shed 0.43% and closed at 17241.00 on 10th Oct. The index after opening gap down traded with positive bias throughout the day and partially managed to recoup its cuts. The move happened on the back of addition of Fresh longs in its FUTS and significant selling in near the money put options. We expect Nifty to trade with positive bias in the short term and thus suggest selling PE as per the given levels.

Strategy:- SELL NIFTY 13 OCT 16800 PE @ 28-30, STOP LOSS 50, TARGET 5.

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