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Nifty Outlook

Markets managed to end in the green amid excessive volatility, in continuation to the rebound of the previous session. After the initial uptick, the benchmark turned negative in no time and continue to inch lower due to pressure in select IT and auto majors. However, recovery in banking, metals and pharma majors engulfed all the losses and pushed the index to a new intraday high. Consequently, the Nifty ended with gains of 0.5% at 14,582 levels.

Markets would first react to Wipro’s earnings outcome in early trade on Friday. We continue to maintain our cautious stance citing rising COVID cases and strict restrictions imposed by the various state government in India which may hamper economic recovery. However, progress on vaccines and supportive global markets may cap the damage. Amid all, the prevailing earnings season will remain on the participants’ radar for cues. To sum it up, we expect volatility to remain high so traders should prefer low beta counters and limit leveraged positions until the market stabilises.

News

* NAM India announced that it has signed a Letter of Intent for an exclusive strategic collaboration with Cathay SITE (Securities Investment Trust) the largest Asset Manager in Taiwan.

* The Heavy Engineering arm of Larsen & Toubro informed that it has won significant contracts for its various business segments such as nuclear, refinery, petrochemical and oil & gas in Q4FY21.

* Hindustan Copper informed that it has raised Rs 500cr via QIP issue to institutional investors. The funds from the QIP are proposed to be used to fund the ongoing capex/ expansion plan of the company.

Derivative Ideas

CIPLA FUTS added around 4% in open interest as LONG buildup was seen in it till closing time. Current chart pattern also indicates further up move in its price. We suggest buying CIPLA in cash market as per below levels.

Strategy:- BUY CIPLA BETWEEN 900-905 STOP LOSS 880 TARGET 950

Investment Pick - Crompton Greaves Consumer Electricals Ltd.

Crompton Greaves Consumer Electricals (CGCE) is engaged in manufacturing and marketing of a wide range of consumer products ranging from fans, light sources and luminaires, pumps and household appliances such as geysers, mixer grinders, toasters and irons.

We like CGCE for its strong growth potential, consistent rise in market share in its key segment coupled with healthy dividend pay-out ratio, strong cash flow generation, lean working capital cycle and robust return ratios. We recommend a Buy on the stock with a target price of Rs. 479.

Buy Crompton Greaves Consumer Electricals Ltd @ 9-12 Months CMP 392.5 TGT 479

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