Rupee could further fall to 81-82; Asian Paints, Cipla, HCL top buys for October series: Manoj Vayalar

Q) Sensex and Nifty50 witnessed over 1% fall for the week gone by amid uncertainty around the US Fed. What led to the price action?
A) All this, while in the September series it was the banking stocks that have been outperforming and helped the Nifty surge towards 18100 levels.

However, for the first time in September futures fresh short positions have been witnessed, along with selling in Metals. Fresh selling, majorly in banking, led to the fall.

Q) Where do you see Nifty50 headed in the coming week, which is also an expiry week. Important levels which one should watch out for?
A) We believe that the Nifty50 has been in the 17,000-17,800 range for a while, and Friday’s closing below 17,500 triggered fresh selling.

The Nifty50 might be heading towards 17,100-17,000 levels. As we are now in the monthly expiry week, positioning of October Nifty futures would be the key indicator.

Q) The rupee tumbled to a fresh low – where do you see currency headed in the near term? Do you see further weakness?
A) Yes, after a long time, the dollar has breached 79.7 levels, which has been a strong resistance. We expect further weakness, with the dollar around 81.80 to 82.00 as a target.

Q) Dollar index hit a fresh 20-year high above 111. Do you see this could turn out to be a worrying sign for Indian markets? What does history suggest?
A) Yes, the dollar index has always triggered selling from the FII desk in Indian equities. We believe 114-115 might be the resistance for the dollar index.

History says FIIs have turned sellers above a seasonal weighted average price in the Dollar Index. In the current scenario, we believe it is 103, and any dip below that can stabilize or lessen this outflow.

Q) Sectorally, FMCG stocks outperformed, while realty stocks suffered the most. What led to the price action, and do you see a similar trend in the expiry week?

A) Banks, IT, and FMCG have been in the pecking order for FIIs. Broadly, FMCG has seen better buying since IT has been underperforming in the last 1-2 years.

We believe

, , and top the list. For the next derivative series, we believe that FMCG and Pharma might see good long positioning.

Realty as a sector has been underperforming Nifty in the Sep series. We believe this might continue in the October contract as well.

Q) Any 3-4 stocks recommendations for the October series?
A) Here are a few recommendations:

Asian Paints: Buy at Rs 3,390-3,400 | Stop Loss Rs 3,300 | Target Rs 3,600

: Buy at Rs 1,030-1,050 | Stop Loss Rs 990 | Target Rs 1,120
: Buy at Rs 890-900 | Stop Loss Rs 860 | Target Rs 960

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)