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Nifty Outlook

After a minor pause in yesterday’s session, the market resumed its downturn and shed over one and a half percent. The benchmark opened gap down as participants remained worried about ECB rate guidance in Europe and awaiting US inflation data outcome. The bias remained negative for most of the session however marginal rebound in the last hour trimmed some losses. Consequently, the Nifty ended with sharp losses of 1.7% at 16,201 levels. All the sectoral indices ended lower largely dragged by financials, IT, metals and energy. On the broader market front, both midcap and smallcap lost in the range of 0.8-1.2%.

Markets will continue to take cues from the global markets in absence of any major domestic event. First, participants will react to the US inflation data and upcoming macroeconomic data (IIP, CPI & WPI) will also be in focus. While the index is gradually inching lower, a mixed trend on the sectoral front is offering opportunities on both sides so traders should align their positions accordingly.

News

* Alembic Pharmaceuticals announced that it has received tentative approval from the USFDA for its Abbreviated New Drug Application for Dasatinib Tablets, 20 mg, 50 mg, 70 mg, 80 mg, 100 mg, and 140 mg.

* Hero MotoCorp, announced that it has strengthens its partnership with Uttarakhand government by handing over 300 motorcycles and 600 helmets to the department of forest (Himalayan Eco Restoration, Biodiversity Conservation and Livelihood Enhancement Society in Rishikesh).

* Strides Pharma Science announced that its step-down wholly owned subsidiary, Strides Pharma Global Pte., Singapore, has received approval for Ibuprofen Oral Suspension USP, 50 mg/1.25 mL (40 mg/mL) (OTC) from the USFDA.

Derivative Ideas

Mostly metal stocks are underperforming and HINDALCO is also trading in tandem with the other metal packs. Further, today i.e. on June 10, It has posted a fresh breakdown from a month-long distribution phase and looks set for a decline ahead. We thus suggest initiating fresh short position through Put Option.

TCS shed 1.96% and closed at 3360 on 10th June. The IT sector has been in corrective bias and TCS is no different. Recently the stock has broken and started trading below its important support zone at 3400-3470. After minor pullback, the stock is facing a hurdle at its previous support which is now acting as a resistance. We anticipate further pain in the stock and thus suggest initiating Shorts with the PE option.

Strategy:- Buy TCS 3350 PE @ 50-55, STOPLOSS 20, TARGET 100.

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