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Nifty Outlook

Markets traded under pressure on the F&O expiry day and lost over one and a half percent. The sentiment was downbeat from the beginning, citing subdued global cues and the continuous uptick in COVID cases in India. Though the benchmark tried to recoup losses in the latter half, selling pressure at the higher levels pushed the bulls on the backfoot. Consequently, the Nifty index ended with sharp losses for the second consecutive session lower by 1.5% at 13,325 levels. The broader markets continued to witness selling pressure as both Midcap and Smallcap ended lower by 2% each. On the sector front, all the indices ended in red wherein auto, realty and consumer durables were the top losers.

The selling pressure has intensified in the last couple of sessions owing to weak global cues and concerns over the second wave of COVID cases. On the benchmark front, Nifty has next critical support at 14,000 levels however rebound in the banking index might result in some bounce or consolidation first. Amid all, we reiterate our cautious stance and suggest traders to focus more on risk management.

News

Cadila Healthcare announced that Zydus Cadila has received tentative approval from the USFDA to market Emtricitabine and Tenofovir Disoproxil Fumarate Tablets 100 mg/150 mg, 133 mg/200 mg and 167 mg/250 mg.

Welspun Enterprise announced that the company has agreed to take over a Hybrid Annuity Mode Project i.e. Six-Laning of Existing Kozhikode Bypass of NH-66 in the state of Kerala from Calicut Expressway Private Limited through the process of Harmonious Substitution of the National Highways Authority of India.

Dilip Buildcon announced that the company has been declared as L-l bidder for the tender floated by the National Highways Authority of India on Hybrid Annuity basis in the state of Karnataka for a project worth Rs 1,137 cr.

Derivative Ideas

INDUSINDBK added around 10% 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 INDUSINDBK in cash as per below levels.

Strategy:- BUY INDUSINDBK BETWEEN 947-953, SLOSS AT 920 TARGET 1030.

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 554.35 TGT 705

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