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Nifty Outlook

Markets started the week with a sharp cut, in continuous to the prevailing corrective phase. The fear of aggressive rate hikes dented sentiment and triggered a gap-down start however rebound in the last hour trimmed some losses. Consequently, the Nifty index closed at 15,774; down by 2.6%. On the sector front, all the indices ended with losses wherein IT, Metal and Banks were the top losers. The broader indices too lost over 2.5% each.

All eyes would be on the CPI data to be released today evening. Moreover, the US Fed meet on Wednesday would induce further volatility. Nifty has almost retested the March 2022 low i.e. around 15,671 levels and its breakdown would pave the way for further decline towards 15,450 levels. In case of a rebound, the 15,900-16,200 zone would act as a hurdle. We recommend using rebound to create shorts in the index until we see some sign of reversal. Stocks, on the other hand, are offering opportunities on both sides so plan accordingly.

News

* Vedanta's iron & steel sector has ventured into international iron ore mining operations in Liberia, West Africa through its subsidiary Western Cluster (WCL) with the ground-breaking ceremony that was held at the Bomi iron ore mine on June 8. WCL is a wholly owned subsidiary of Bloom Fountain (BFL) which is in turn a wholly owned subsidiary of Vedanta.

* Crompton Greaves Consumer Electrical board approved the buyback of rated, listed commercial paper aggregating to an amount of up to Rs 600 cr and to raise long term funds by way of issuance of secured, rated, listed, redeemable non-convertible debentures on private placement basis up to Rs 925 cr.

* The board of directors of AU Small Finance Bank has approved the allotment of 31,50,93,233 equity shares of Rs 10 each as fully paid-up Bonus Equity Shares on 12th June, 2022, in the ratio of 1 (One) equity share of Rs 10 each to the eligible members whose name appear in the list of beneficial owners as on 10th June, 2022, being the record date fixed for this purpose

Derivative Ideas

KOTAKBANK shed 3.04% and closed at 1737.35 on 13th June. The BANKING Sector has been witnessing pressure and KOTAKBANK is trading in sync. The stock has broken below its trend line support with a bearish runaway gap. The move happened with incremental volumes and addition of Fresh Shorts in its FUTS. We expect further pressure going forward and thus suggest initiating Shorts with the PE option.

Strategy:- Buy KOTAKBANK 1720 PE@ 28-32, STOPLOSS 17, TARGET 60.

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