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Nifty Outlook

Markets traded with a positive bias and managed to close half a percent higher on the monthly expiry day. After yesterday’s fall in the index, the benchmark opened with an uptick and inched gradually higher as the day progressed. Among the sectors, IT majors played a crucial part in recovery and select stocks from FMCG and auto pack also aided the index to hold the gains. Eventually, the Nifty ended higher by 0.6% at 15,790 levels. Amid all, the broader indices underperformed wherein midcap ended with losses of 0.3% while smallcap ended flat.

The prevailing consolidation in the index is largely in line with the global counterparts so participants should continue to keep a close watch on the world market for cues. Despite the positive bias, we’re seeing restricted participation so traders should focus more on the selection of sectors and stocks. On the index front, a decisive break above 15,900 in Nifty would pave the way for an up move else consolidation will continue.

News

* Zydus Cadila announced it has received tentative approval from the USFDA to market Fingolimod Capsules in the strength of .25 mg. The drug will be manufactured at the group’s formulation manufacturing facility at the SEZ, Ahmedabad.

* SBI Card announced it has joined hands with Fabindia, India’s largest retail platform for a wide range of handcrafted products by the artisans of the country, to launch an exclusive co-branded contactless credit card - Fabindia SBI Card.

* HFCL announced collaboration with Telecom Infra Project for setting up their 2nd PM-WANI powered connectivity for Baidebattu village in Karnataka. This PM-WANI network will provide high speed Wi-Fi Internet to over 9,000 residents of the otherwise poorly connected village located in Brahmavara Taluk, Udupi district.

Derivative Ideas

MINDTREE JULY FUTS added around 27% in open interest as LONG buildup was seen in it. Current chart pattern also indicates further up move in its price. We suggest buying in MINDTREE in cash as per below levels.

Strategy:- BUY MINDTREE BETWEEN 2510-2520 STOPLOSS 2470 TARGET 2610.

Investment Pick - Finolex Industries Ltd.

Finolex Industries Limited (FIL) is a leading manufacturer of PVC pipes and fittings and the only backward integrated player in PVC resin. The company offers the latest range of PVC-U pipes and fittings which are used in agriculture, construction and industrial operations. It has strategically located manufacturing plants and a strong distribution network.

FIL is well established in agri pipes and has plans to expand in non-agri segment, its backward integrated manufacturing of PVC resin, strong distribution network and changing product mix would aid in earning better revenues as well as profits. Besides its strong brand recall value, growth plans and expansion in the PVC pipes segment are encouraging which makes it one of our preferred picks in this space. On the financial front, FIL has a healthy balance, decent cash flow and it has lowered its debt to comfortable levels over the years. We have initiated a BUY on the stock with a target price of Rs 222.

Buy Finolex Industries Ltd. @ 9-12 Months CMP 171.7 TGT 222

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