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Nifty Outlook

Markets started the week on a feeble note and lost over a percent, tracking weak global cues. After the flat start, the Nifty gradually inched lower as the session progressed and settled around the day’s low to close at 16,887 levels. The selling pressure was widespread and all the sectoral indices, barring pharma, ended lower wherein the metal and PSU banking were among the top losers.

Meanwhile, the broader indices traded mixed and settled with a cut of 0.5-1.3 %. The pressure in the global indices, especially the US, is weighing on the sentiment and we feel the scenario would continue in absence of any major domestic trigger. A decisive breakdown below 16800 in Nifty could intensify the selling. Participants should stay light and prefer defensive viz. pharma and FMCG over others for long trades.

News

* Mahindra sells highest ever monthly volume of 64,486 vehicles, registering a growth of 129% YoY; Takes No.1 position in SUV Market with 34,262 UV sales in September 2022. Mahindra’s Farm Equipment Sector achieves highest ever monthly tractor sale in India at 47,100 units, during September 2022.

* Kajaria Ceramics to make investments upto Rs.125 crores 50% of project cost in a company to be incorporated in Nepal, by way of equity and/or loan, for establishing a manufacturing facility in Nepal on joint venture.

* Prosus NV has canceled a $4.7 billion deal to buy BillDesk after conditions on the deal were not met. The deal had received approval by the Competition Commission of India (CCI) last month, though the company said that ‘certain conditions precedent’ were not met by the deadline at the end of last month.

Derivative Ideas

NIFTY shed 1.21% and closed at 16887.35 on 3rd Oct. The index after opening flat witnessed selling pressure throughout the day. The move happened on the back of addition of Fresh Shorts in its FUTS and significant Call writing at 17000 levels. We expect Nifty to trade with weakness bias in the short term and thus suggest selling CE as per the given levels.

Strategy:- SELL NIFTY 6 OCT 17200 CE @ 38-40, STOP LOSS 60, TARGET 5.

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