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Nifty Outlook

Markets started the week on a feeble note and lost over three and a half percent. The benchmark indices opened a gap down and continue to plunge southwards due to rising COVID-19 cases, vaccine supply issues and the possibility of lockdown in various parts of the country. Selling pressure widened as the day progressed and consequently the Nifty ended lower by 3.5% at 14,310 levels. The broader markets too were not spared and it ended lower in the range of 4.8-5.3%.

On the sector front, all the indices ended with negative bias wherein PSU banks, auto and metals were the top losers. Markets will first react to TCS results and macroeconomic data viz. IIP and CPI inflation in early trade on Tuesday i.e. April 13. The rising Covid cases combined with the fear of lockdown have pushed the bulls completely on the back foot.

We thus suggest maintaining a cautious stance in the near term. Besides, stock-specific volatility will remain high, with the start of Q4FY21 earnings and investors should focus on sectors such as IT, FMCG and Pharma as they are expected to post strong numbers. On the benchmark front, Nifty has the next critical support at 14,100 levels. In case of a rebound, the 14,500-14,650 zone would act as a hurdle.

News

* Biocon Pharma, a wholly owned subsidiary of Biocon, has received a certificate of Good Manufacturing Practice compliance from the Medicines & Healthcare products Regulatory Agency, the United Kingdom, for its manufacturing facility at Biocon Park in Bengaluru.

* Praj Industries announced that it has bagged an order to set up a syrup-based ethanol plant from Godavari Biorefineries in Karnataka. Its manufacturing capacity of Godavari Biorefineries will expand from 400 to 600 kilo litre per day.

* Flipkart announced a strategic and commercial partnership with the Adani Group. Flipkart will work with Adani Logistics, a wholly owned subsidiary of Adani Ports & Special Economic Zone Ltd, to strengthen Flipkart’s supply chain infrastructure and further enhance its ability to serve its rapidly growing base of customers.

Derivative Ideas

IRCTC FUTS added around 10% in open interest as short buildup was seen in it till closing time. Current chart pattern also indicates further down move in its price. We suggest selling IRCTC APRIL FUTURES as per below levels.

Strategy:- SELL IRCTC APRIL FUT BETWEEN 1610-1620 STOP LOSS 1690 TARGET 1480.

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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