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Nifty Outlook

Markets inched lower and lost nearly a percent amid mixed cues. Initially, weakness in the global markets was weighing on the sentiment and continued selling in banking, FMCG and IT majors kept the pressure intact till the end. Eventually, the Nifty ended with a cut of nearly 1% to close at 16,416 levels. The broader indices, midcap and smallcap, ended lower and lost in the range of 0.6%-0.8%.

The focus will be on MPC’s meeting outcome on Wednesday amid the expectation of a further rate hike. Besides, their outlook on growth and inflation holds importance. Traders should maintain extra caution in rate-sensitive and prefer less volatile stocks for day trade. On the index front, the bias would again turn negative below 16,300 else consolidation would continue with the upper band at the 16500-16700 zone.

News

* Aurobindo Pharma announced that its wholly owned subsidiary company, Eugia Pharma Specialties has received a final approval from USFDA to manufacture and market Leuprolide Acetate Injection, 14 mg/2.8 mL MDV (Kit). Leuprolide Acetate Injection, 14 mg/2.8 mL (1 mg/0.2 mL), Multiple-Dose Vials, to be bioequivalent and therapeutically equivalent to the reference listed drug (RLD), Lupron Injection, 14 mg/2.8 mL (1 mg/0.2 mL), of AbbVie Endocrinology Inc.

* HG Infra has received the Letter of Award from Adani Road Transport ltd for the project in the State of Uttar Pradesh for the contract price of Rs 4970.99cr.

* Ashoka Buildcon receives Letter of Acceptance for a project worth USD 106.4mn from the Government of the co-operative Republic of Guyana. The project is for Procurement of Phase 1: East Bank-East Coast Road Linkage Project (Ogle to Haags Bosch, Eccles) and the construction period is 730 days from the date of commencement.

Derivative Ideas

VOLTAS shed 1.27% and closed at 999.55 on 7th Jun. The stock has been witnessing huge selling pressure after finding resistance at 1350 levels. The down move was supported by good volumes and huge addition of Shorts in the FUTS. After some Dead Cat Bounce, the stock has resumed its correction with marginal rise in OI implying more comfort in Shorts. We expect VOLTAS to test 920 levels in the immediate short term and thus suggest initiating Shorts with the PE option.

Strategy:- BUY VOLTAS 980 PE @28-30, SLOSS AT 17, TRGT 50,

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