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Nifty Outlook

Markets extended gains for the third successive session and settled around the day’s high, tracking favorable global cues. After the firm start, the benchmark hovered in a narrow range, taking a breather after the recent surge however buoyancy on the broader front kept the participants busy. Among the benchmark indices, the Nifty index ended up by 0.5% to close at 16,220 levels. The sectoral indices traded mixed wherein FMCG, energy, media witnessed decent traction while metals and realty traded subdued.

Markets will first react to TCS and D-mart numbers in early trades on Monday. Indications are in favor of further rebound in the index with some intermediate pause. The Nifty has the potential to test 16,500 levels and the 15900-16000 zone would act as a cushion, in case of any dip. Apart from the earnings, global cues will remain on the market’s radar. Amid all, we suggest maintaining stock-specific trading approach and focusing more on overnight risk management.

News

* TCS Q1FY23 consolidated revenue came in at Rs 52,758cr, up by 16.2% YoY and 4.3% QoQ. EBIT stood at Rs 12,186cr, grew by 5% YoY and de-grew by 3.5% QoQ. EBIT margin stood at 23.1% in Q1FY23, down by 242bps YoY and down by 186bps QoQ, due to increase in employee cost and other expenses.

* Happiest Minds Technologies announced a strategic partnership with CloudFabrix’s Robotic Data Automation Fabric™, the world’s first data fabric designed to unify Data Observability, AIOps, and Automation.

* Kotak Mahindra Bank announced that it has acquired the Agri and Healthcare Equipment financing portfolio of De Lage Landen Financial Services India Pvt. Ltd., a subsidiary of De Lage Landen International B.V., owned by Rabobank. With this acquisition, Kotak will gain access to over 25,000 high-quality customers with a total standard loan outstanding of around Rs 582 Cr. In addition, it has acquired the NPA portfolio with a total loan outstanding of around RS 69 cr.

Derivative Ideas

NIFTY gained 0.54% and closed at 16220.6 on 8th July. The index after opening with a gap consolidated in a range for the whole day. However as no significant longs are seen in its FUTS with heavy CE writing seen at 16200 and beyond levels, we believe NIFTY might find resistance around the 16250-16300 zone. We expect NIFTY to trade in the range of 16000-16400 in the short term and thus suggest selling CE as per the given levels.

Strategy:- SELL NIFTY 14 JUL 16500 CE@40-42, STOP LOSS 60, TARGET 10.

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