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Nifty Outlook

Markets traded volatile for yet another day and ended almost unchanged, in continuation to the recent consolidation phase. The benchmark hovered range bound in the first half however sharp swings in index majors in the latter half kept the traders on their toes. Finally, the Nifty index closed at 17,353 levels. Amongst the sectors, Banking, Consumer Durables and Oil & Gas ended with gains whereas IT, Telecom and Metal ended with losses. The broader markets managed to outperform the benchmark amid choppiness and gained over half a percent each.

We expect choppiness to continue in the index on Thursday as well due to the scheduled weekly expiry. Nifty has been hovering within the 17,250-17,400 zone and either side break would trigger the next directional move. Apart from the global markets, traders should keep a close watch on the banking pack for cues.

News

* Maruti Suzuki’s August production was down 7.9% at 1.14 lakh units against 1.24 lakh units (YoY). Production volume an August was affected due to electronic components shortage.

* EID Parry India has approved the setting up of a 120 KLPD grain/sugar syrup/molasses based Distillery at Sankili unit in Andhra Pradesh.

* PSP Projects is in receipt of Letter of Intent(s) for projects worth Rs 132.57cr towards industrial and precast segment from different clients in Gujarat.

Derivative Ideas 

Nifty FUTS added around 1% in open interest in as LONG buildup was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in Nifty 17400 CE as per below levels.

Strategy:- BUY Nifty 17400 CE@20 sloss at 1 trgt 40.

Investment Pick - Nippon Life India Asset Management Ltd.

Incorporated in 1995, Nippon Life Asset Management Company (NAM) is one of the leading AMCs in India with a total AUM of ~Rs. 3.79 tn. It is involved in managing the mutual fund (AUM of Rs. 2,442 bn) and managed accounts including Portfolio Management Services (PMS), Alternate Investment Funds (AIF), Pension Funds and Offshore Funds.

We continue to remain constructive on the Indian mutual fund industry given its low penetration level as compared to major economies (11% AUM to GDP ratio v/s world average of 62%). Further, NAM’s consistent increase in equity assets, industry-leading retail assets, focus on growing SIP book and strong presence in B-30 cities augurs well for the growth prospects of the company. We recommend a Buy on the stock with a target price of Rs. 492.

Buy Nippon Life India Asset Management Ltd @ 9-12 Months CMP 435.8 TGT 492

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