Index Trends And Stocks In Action For May 23, 2014

Indian Equity market opened on positive note on Thursday, on back of strong global cues. However after rallying sharply in morning trade the market pared gains towards end of the session. The Nifty index closed at 7276 recording a gain of 23 points. In our last write up we mentioned that market will witness range bound movement and there would be stock specific movement it was in line with our expectation.

Market continues to consolidate in narrow range and range bound price swings to continue for couple of trading session. Fresh up move is expected only if index manages to trade above levels of 7360. On downside 7220-7190 is strong support zone for Nifty. If Nifty manages to trade below this level we can expect correction up to level of 7120-7100.

The 24% stake sale in the Multi Commodity Exchange (BSE Code: 534091), put up by anchor investor Financial Technologies (BSE Code: 526881) which wishes to divest, is likely to take place soon. Kotak Mahindra Bank (BSE Code: 500247) which can buy up to 15% is said to be a front runner in the race. The BSE exchange and Reliance Capital (BSE Code: 500111) are said to be out of the race, while an informal consortium led by US-based Chicago Mercantile Exchange is believed to have decided to send binding bids. All the stocks in the news are likely to remain in focus in today’s trade.

Commercial vehicle maker Ashok Leyland (BSE Code: 500477) reported over two-fold jump in net profit at Rs 363.39 crore for the fourth quarter ending March 31 and sounded bullish about its prospects going ahead. The Chennai-based company had reported net profit of Rs 150.03 crore during the corresponding period of previous year. Net sales, however, declined to Rs 3,020.95 crore for the fourth quarter of last financial year from Rs 3,648.41 crore. The stock may remain in action in today’s trade.

Gulf carrier Qatar Airways is likely to invest in the debt-ridden SpiceJet (BSE Code: 500285) by purchasing its parking slots overseas, sources said. Officials of the state-run Qatar Investment Promotion Authority are likely to meet the top brass of SpiceJet shortly. The Kalanithi Maran-promoted domestic airline had earlier this week said it was in "advanced stage of discussions" with an overseas entity for capital infusion. The stock may trade with a positive bias in today’s trade.

SKS Microfinance (BSE Code: 533228) said its Rs 400-crore Qualified Institutional Placement (QIP) was oversubscribed multiple times. The QIP, which was launched on May 19, closed on May 22, 2014. The management has said that the overwhelming response to QIP endorses investors' confidence in SKS Microfinance Ltd's turnaround and improved business prospects for the MFI sector. The stock may witness some buying interest in today’s trade.