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Nifty Outlook

Markets lost over a percent amid volatility and settled around the day’s low as well. The news of rising COVID cases in India and caution ahead of the US Fed meet were weighing on investors’ sentiments. After opening on the flat note, the benchmark declined gradually as the day progressed and maintained that bias till the end. Among the benchmark indices, Nifty settled at 14,721 levels, down by 1.3%. The selling pressure was widespread and most of the sectoral indices ended in the red.

Markets would first react to Fed meet outcome in early trade on Thursday. We maintain our cautious view and suggest keeping the long positions hedged. A decline below 14,600 in Nifty would pave the way for a further slide. We’re seeing profit-taking across the board except IT and FMCG so plan your trades accordingly.

News

*Blue Star announced the launch of its new range of ‘Mass Premium’ split air conditioners, with the intent to expand its market reach and target the mass market.

*Shakti Pumps India has awarded a contract from Government of Uganda represented by Ministry of Water and Environment for Supply of solar powered water pumping Systems at a contract price of USD:- 3,53,00,000 exclusive of VAT.

*HFCL announced that it has bag order worth Rs 221.2cr for Kanpur Metro (Corridor-1 and Corridor-H) and Agra Metro (Corridor-I) Projects from Uttar Pradesh Metro Rail Corporation Ltd.

Derivative Ideas

HAVELLS FUTS added around 5% in open interest addition as short buildup was seen in it till closing time. Current chart pattern also indicates further up move in its price. We suggest buying HAVELLS 1050 PE as per below levels

Strategy:- BUY HAVELLS 1050 PE BETWEEN 15-17 SL 10 TARGET 29

Investment Pick - Kansai Nerolac Paints Ltd

Established in 1920, Kansai Nerolac Paints Limited (KNPL) is a subsidiary of Kansai Paint Co. Ltd., Japan. It is the second largest coating company in India and a market leader in Industrial Coatings. KNPL has well established products in both the decorative and industrial segments. It has pan-India presence with 6 manufacturing plants, 104 depots and 27,500+ customer network. In international markets it expanded in Nepal, Bangladesh and Sri-lanka.

Going ahead, its strategy is to grow in both segments as well as gain market share from unorganised players on the back of positive sector trends, innovative products, focus on non-auto segments, increase distribution network and expand in newer geographies and in semi-urban and rural areas. Moreover its recent foray into adhesives and construction chemicals segment would aid benefits in the coming quarters. We have a positive view on KNPL hence we are initiating with a Buy rating on the stock with a target price of Rs. 705.

Buy Kansai Nerolac Paints Ltd @ 9-12 Months CMP 558.8  TGT 705

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