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Nifty Outlook

Markets recovered sharply on Friday and gained over one and a half percent, tracking firm domestic cues. The beginning was downbeat however the Nifty index recovered in no time and witnessed strong momentum post the MPC’s monetary policy outcome. It finally settled at 17,094.35 levels; up by 1.64%. All sectors contributed to the move but it was banking and financials which topped the gainers' list. The rebound was overdue but the key is to hold the gains amid the feeble global cues.

We feel the recovery would strengthen above 17,200 in Nifty while 16,800 would continue to act as critical support. Meanwhile, participants should stay focused on overnight risk management and prefer index majors over others.

News

* Dilip Buildcon has declared as Ll bidder for *Ahmedabad Metro Rail Project, Phase- 2 in the state of Gujrat. order worth Rs. 723.45 Crores. Construction of 7.553 kms elevated viaduct and 7 nos. of stations from Sector- I to Mahatma Mandir (ch. 31945.443m to 39498.302m. Package C3) in connection with Ahmedabad Metro Rail Project Phase-2.

* Mindtree, announced that it has been named a Major Contender in Everest Group’s Industry 4.0 Services PEAK Matrix® Assessment 2022. This was Mindtree’s debut in Everest Group’s assessment of engineering service providers for their Industry 4.0 leadership.

* RBI raises repo rate by 50 bps, continues with withdrawal of ‘accommodative’ stance. The Monetary Policy Committee (MPC) increased the repo rate, or the key rate at which the RBI lends short-term funds to commercial banks, to 5.9% from 5.4%.

Derivative Ideas

NIFTY gained 1.64% and closed at 17094.35 on 30th Sep. The index gave a sharp pullback after the RBI meet. The move happened on the back of both fresh long formation and short covering. Significant put writing seen at 16700 levels. We expect the Nifty to consolidate with a positive bias in the range of 16800-17200 in the short term thus suggesting selling PE as per the given levels.

Strategy:- SELL NIFTY 6 OCT 16600 PE @ 38-40, STOP LOSS 60, TARGET 5

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