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Nifty Outlook

Nifty traded volatile in a range and settled marginally lower, taking a pause after the recent surge. Amongst sectors, IT and banking were laggards whereas telecom, FMCG, and consumer durables ended with gains. The broader markets also witnessed profit taking and ended lower.

In absence of any major event, global cues would continue to dictate the trend. Indications are in the favor of some consolidation or profit taking thus we recommend maintaining extra caution in stocks selection. On the benchmark front, Nifty has immediate support around the 17,200-17,250 zone.

News

* Dr. Reddy's Laboratories announced the launch of the prescription drug Minoxidil topical solution USP 2% and 5% for the treatment of female pattern hair loss. Dr. Reddy's will sell its products under the brand names Mintop TM 2% and Mintop Eva 5% respectively.

* Edelweiss Asset Reconstruction Company Limited (EARC), a subsidiary of Edelweiss Financial Services has received the approval of the Reserve Bank of India for conversion of the Compulsorily Convertible Preference Shares (CCPS) held by CDPQ Private Equity Asia Pte Ltd. (CDPQ) in EARC and, consequently, CDPQ becoming a Sponsor of EARC as per the RBI Regulations.

* LIC Housing Finance today announced a strategic partnership for providing home loan products to over 4.5 cr customers of India Post Payments Bank.

Derivative Ideas 

ICICIGI FUTS added around 12% 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 ICICIGI as per below levels.

Strategy:- BUY ICICIGI BETWEEN 1575-1580 SL 1555 TARGET 1625

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 420 TGT 492

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