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Nifty Outlook

Markets traded subdued and ended almost unchanged, in continuation to the prevailing consolidation phase. The benchmark started with an uptick, tracking supportive global cues and inched further higher initially but profit-taking in the index majors trimmed all the gains as the session progressed. Consequently, the Nifty ended flat at 14,911 levels. A mixed trend was witnessed across sectoral indices wherein banks, realty and metals were the top losers while IT and FMCG ended in the green. Amid all, the broader indices, midcap and smallcap, outperformed and ended higher by 0.4% and 0.3%.

The US markets are doing comparatively well despite caution ahead of the Fed meet and rising bond yields. At the same time, our markets are facing pressure and hovering in a range, after the subdued macroeconomic data and rising in the COVID cases. We feel the prevailing consolidation would end soon. Meanwhile, we suggest avoiding directional trades and preferring hedged positions.

News

*The construction arm of L&T has secured orders from its prestigious client for Water & Effluent Treatment Business and Building & Factories Business.

*TCS announced the launch of its SaaS based Automated Vulnerability Remediation platform that helps enterprises stay one step ahead of malicious attacks by identifying and prioritizing vulnerabilities in their software libraries and proactively fixing them.

*HG Infra has received the purchase order from NTPC for transportation of 26.41 lakh Cu. M. of pond ash from NTPC Ramagundam to NHAI-PIU Mancherial road construction project. The estimated project cost is Rs 122.4cr and company's bid price is Rs 94.95cr.

Derivative Ideas

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

Strategy:- BUY GUJGASLTD BETWEEN 529-532 SL 515 TARGET 560.

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 551.9  TGT 705

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