Index Trends And Stocks In Action For May 27, 2014

Indian Equity market ended flat on Monday, after a severe setback in mid afternoon session which wiped off a substantial portion of it gains. The Nifty settled at 7361 losing 5 points. In our last write up we mentioned two important levels on upside 7480-7500 will act as resistance and on downside 7250 will act support and what we saw in today’s session was in line with our expectation. Market at the end looked like it closed flat but the fact is market closed down by 160-175 points from intraday highs. It means the bear’s had upper hand in today’s session.

Now what the chart hints, on Friday we had a breakout with good volumes on Nifty and today we saw that breakout failed. When a breakout fails in a bull market chances are that market momentum is reversing, however this does not mean that the trend has change. The uptrend is still intact but trader should book profit at higher levels and look into dips around levels of 7170 to enter into the market.  For day trading 7290 and 7240 will act as important support. On upside 7370 will act as strong resistance and next resistance around levels of 7420.

State gas utility GAIL India (BSE Code: 532155) reported a 57% jump in its fourth-quarter net profit on the back of better petrochemical and LPG prices and drop in subsidy outgo. GAIL posted a net profit of Rs 972 crore in January-March quarter, up from Rs 618 crore in the same period a year ago. Net profit was up as the company realised Rs 96,000 per ton price for petrochemicals it produces, against Rs 82,000 a ton in the previous fiscal, he said, adding price realisation on LPG also increased by 8 per cent to Rs 56,000 a ton. The stock may trade with a positive bias in today’s trade.

Jubilant Life Sciences (BSE Code: 530019) has informed that its subsidiary will receive USD 147.5 million (over Rs 860 crore) funding from IFC, a member of the World Bank Group, to strengthen its generic drug manufacturing facilities. The loan will help Jubilant Life Sciences increase focus on the pharmaceutical sector and strengthen its generic drug manufacturing facilities in India. The stock may remain in focus in today’s trade. 

Sterlite Technologies (BSE Code: 532374) has informed that its arm Sterlite Grid has been awarded sixth ultra- mega transmission project (UMTP) on build-own-operate basis by the Ministry of Power. The Kashmir valley has been troubled by frequent blackouts on account of unavailability of sufficient power. These blackouts occur mostly during the winter months thereby having a severe impact on the lives of Valley residents. The stock may remain in limelight in today’s trade.

Global liquor giant Diageo Plc has received market regulator Sebi's clearance for an open offer to acquire additional 26% stake in  United Spirits (BSE Code: 532432) for Rs 11,448.91 crore. This is the second open offer made by Diageo to gain majority control in India's number one liquor firm. As part of the deal to buy 53.4 percent stake in Vijay Mallya-led UB group's USL, Diageo has made a Rs 11,448.91 crore open offer for purchase of 26 percent stake in the company from non-promoter shareholders. The stock may witness some buying activity in today’s trade.