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Nifty Outlook

Markets traded volatile and lost nearly a percent, in continuation to the prevailing corrective phase. The benchmark opened on a firm note following positive global cues however it pared all its gains no time and hovered range-bound thereafter.

Dometic cues viz. decline in index major, Reliance, post the results and news of fresh feud between India-China at Sikkim border dented the sentiment. Finally, the Nifty index ended lower by 0.9% at 14,238.9 levels. On the sector front, except healthcare and metals, all the other indices ended with losses wherein Oil & Gas, IT and Auto were the top losers.

The broader indices were trading under pressure from the beginning and lost in the range of 1.2% each. It’s a holiday-shortened week and we expect volatility to remain high ahead also due to the scheduled expiry of January month derivatives contracts.

Besides, we’re seeing participants speculating on the probable announcements in the Union Budget, which is further adding to the volatility. Amid all, we reiterate our view that a decisive close below 14,200 in Nifty would derail the present momentum so participants should align their positions accordingly.

News

* Mahindra Holidays reported its numbers wherein revenue was down 16.8% YoY to Rs. 489 cr. Its net profit came in at Rs. 0.2 cr as against Rs. 5 cr YoY.

* PNC Infratech announced it has received Letter of Award for 6 new EPC for Projects Survey, Design, Preparation of DPR, Construction, Commissioning and O&M for l0 years of Rural Water Supply.

* Kotak Mahindra Bank reported 16.1% YoY growth in net profit which came in at Rs. 1,854 cr. The NII grew by 16.8% YoY to Rs. 4,007 cr.

Derivative Ideas

CADILAHC FEB FUT added around 34% in open interest addition as LONG buildup was seen in it in till closing time. Current chart pattern also indicates further up move in its price. We suggest buying CADILAHC as per below levels.

Strategy:- BUY CADILAHC BETWEEN 460-462 SL 450 TARGET 476

Investment Pick - SBI Life Insurance Company Ltd.

* SBI Life Insurance Company Ltd. is a joint venture between State Bank of India and BNP Paribas Cardiff S.A. It is one of the leading life insurers in India with a healthy market share of 13.3% in terms of Individual rated premium. SBI Life offers a comprehensive range of life insurance and pension products at competitive prices, ensuring high standards of customer service and world-class operating efficiency.

* Within the industry, SBI Life is one of our preferred picks given its huge untapped client base, wide distribution reach and industry-leading cost ratios. Further, increased focus on business through digital channels and a strong distribution platform should lead to consistent market share gains for the company. We initiate with a Buy rating on the stock with a target price of Rs. 1069.

Buy SBI Life Insurance Company Ltd @ 9-12 Months CMP 935.5 TGT 1,069

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