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Nifty Outlook

Markets tanked on the weekly expiry day and lost over 2%, tracking feeble global cues. Initially, the benchmark opened with an uptick, in reaction to the rate hike by the US Fed, which came in line with the expectation. However, it couldn’t sustain for long and gradually drifted lower as the day progressed. The breakdown of March low i.e. 15,670 levels in Nifty on the weekly expiry day further added to the pressure. Consequently, the Nifty index settled around the day’s low to close at 15,360. All the sectoral indices traded in tandem and ended lower wherein the metal and media stocks were trashed badly. The broader indices too ended with the sharp cuts and lost in the range of 2.5-3.5%.

Markets are skeptical about how the global economies would attain growth amid the aggressive tightening. After the decisive breakdown below 15,650 in Nifty, the next major support zone exists around the 14,800-15,000 zone. We feel it’s prudent to stay light and align the positions accordingly until we see some decisive signal of reversal.

News

* UPL through its subsidiary USCL has acquired Kudos Chemie for Rs 40 cr, and to invest Rs 237 cr in Kudos over a period of 2 years as per resolution plan approved by NCLT.

* Indian Overseas Bank has approved the capital plan for FY23. The bank will raise up to Rs 1,000 cr by issuing equity shares and another Rs 1,000 cr by issuing bonds, in FY23.

* Mahindra Bloomdale Developers Ltd, a wholly owned subsidiary of Mahindra Lifespace Developers, has launched its second residential project ‘Mahindra Nestalgia’ at Pimpri Chinchwad, Pune

Derivative Ideas

TATACHEM shed 2.18% and closed at 853.75 on 16th June. The stock has plunged sharply after a fresh breakdown from its 3–months long distribution phase. The down move consists of rise in OI suggesting Short Buildup with confluence of chart indicators pointing the further fall ahead. We thus suggest creating Shorts as per the given levels.

Strategy:- SELL TATACHEM FUTS @ 860-865, STOPLOSS 885, TARGET 825.

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