Index Trends And Stocks In Action For June 11, 2014

Indian Equity market opened on negative note as profit taking took a toll of several front line stocks, however health care and Information technology stocks provided some support to market and helped market to erase losses. The Nifty settled at 7656 gaining 1.8 points. In our last write up we mentioned that RSI is showing negative divergence and we could see a dip and this was in line with our expectation.

On daily chart Nifty has formed a bearish hanging man candlestick pattern, after a long uptrend the formation of a hanging man is bearish because prices hesitated by dropping significantly during the day. Granted buyers came back into the stock and pushed prices back near the open but the fact that prices were able to fall significantly shows that bears are testing the resolve of the bulls. However like any pattern this candlestick pattern requires a confirmation on the next day. For day trading important support is around levels of 7570 and next support is around 7510. On upside 7690 will act as major resistance.

Larsen & Toubro (BSE Code: 500510) plans to raise about Rs 6000 crore through non-convertible debentures for capital expenditure, equity infusion in subsidiaries and debt repayment in the current fiscal. The company will be seeking shareholders' nod to raise the capital through debentures as stipulated in the Companies Act. Additionally, L&T will be seeking shareholder approval to raise USD 600 million (around Rs 3,500 crore) through equity and hybrid instruments such as Qualified Institutional Placement (QIP), foreign currency convertible bonds and so on. The stock may remain in focus in today’s trade.

Market regulator SEBI has given approval to Indian Hotels Company's (BSE Code: 500850) proposal to raise up to Rs 1,000 crore from rights issue. In rights issue, shares are issued to existing investors as per their holding at pre-determined price and ratio. Tata group firm Indian Hotels Company had filed draft documents with the Securities Exchange Board of India (Sebi) in April for the rights issue. The stock may remain in action in today’s trade. 

AgroTech Foods (BSE Code:  500215) has opened its new manufacturing unit the country in Gujarat to start local production of 'Sundrop Peanut Butter'. The company, which was earlier importing peanut butter, said the new manufacturing facility will serve as an integrated multi category grocery and snacks manufacturing hub for the India market. The stock may trade with a positive bias in today’s trade.

The joint venture company between NTPC (BSE Code: 532555), NPCIL, Anushakti Vidhyut Nigam, is facing legal issues, as under the law only government or its agencies can undertake activities in the atomic field, a senior government official said here today. In media, CBS Venkataramana, Additional Secretary, Department of Atomic Energy, also said the government's ambitious target of creating 20,000 mw nuclear power may not be achievable under the current conditions.  NTPC may witness volatile trades in today’s session.