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Nifty Outlook

Markets extended the up move and gained over half a percent, tracking firm global cues. After the gap up opening, the benchmark traded range bound in the first half however noticeable recovery in metal, banking and realty majors triggered strong momentum as the day progressed. Finally, Nifty settled with healthy gains of 0.8% to close at 16,625 levels. The broader markets too witnessed a rebound wherein both Midcap and Smallcap gained in the range of 1.5-2%.

The recent rebound lacks decisiveness and continuous participation by the banking pack is critical for Nifty to regain momentum and surpass the 16,700 zone decisively. Besides, participants should continue with a selective approach in midcap and smallcap space and avoid jumping into a trade only based on the price move.

News

* Infosys announced the signing of a new minimum three-year contract with UCAS, the admissions service for UK higher education. As part of the new agreement Infosys will provide a wide range of digital services that will enable UCAS to further develop the capabilities that connect learners to universities, awarding bodies, schools, and other organisations, built on a dynamic digital suite of systems able to rapidly respond to the evolving UK higher education sector.

* Asian Granito announced that the board has approved issue of equity shares through rights issue under fast-track mode.

* Bajaj Finserv got approval from SEBI to set up an asset management company. The Company would be setting up an Asset Management Company and the Trustee Company, directly or indirectly i.e., itself or through its subsidiary, in accordance with applicable Sebi Regulations and other applicable laws.

Derivative Ideas 

TORNTPOWER FUTS added around 14% in open interest in as LONG buildup was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in TORNTPOWER as per below levels.

Strategy:- BUY TORNTPOWER BETWEEN 450-455 SL 440 TARGET 475.

Investment Pick - Nippon Life India Asset Management Ltd.

Incorporated in 1995, Nippon Life Asset Management Company (NAM) is one of the leading AMCs in India with a total AUM of ~Rs. 3.79 tn. It is involved in managing the mutual fund (AUM of Rs. 2,442 bn) and managed accounts including Portfolio Management Services (PMS), Alternate Investment Funds (AIF), Pension Funds and Offshore Funds.

We continue to remain constructive on the Indian mutual fund industry given its low penetration level as compared to major economies (11% AUM to GDP ratio v/s world average of 62%). Further, NAM’s consistent increase in equity assets, industry-leading retail assets, focus on growing SIP book and strong presence in B-30 cities augurs well for the growth prospects of the company. We recommend a Buy on the stock with a target price of Rs. 492.

Buy Nippon Life India Asset Management Ltd @ 9-12 Months CMP 399.65 TGT 492

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