Markets may track the stellar performance of US bourses

In conclusion, we expect the markets to remain positive with some volatility towards the latter part of the day as investors are still jittery to enter the markets and prefer to wait and watch the Q3 numbers before taking an investment call. We advise our readers to stay cautious and stick to cheaply available large-cap bets as they are more likely to see some positive movements.

Stocks In Action

According to Economic Times, the Maharashtra state assembly has increased the maximum electricity duty payable to 150 paise per unit from 40 paise, putting further cost pressure on the companies which are already feeling the heat from rising costs and slowing demand. Expect some negative action in scrips of companies like Reliance Industries, JSW Steel, Ultra Tech Cement and ACC, which own large captive power units in the state and would now have to shell out more for power generated from their units.

Expect some negative action in the scrip of Tanfac Industries as its plant located at Cuddalore suffered severely due to the recent cyclonic storm in southern India. There were extensive damages to its plant and machinery and it has temporarily been shut down.

According to sources, the telecom ministry will raise a demand of over Rs 1,590 crore from five telecom firms viz. Tatas, Vodafone, Reliance Communications (RCom), Bharti Airtel and Idea Cellular for under-reporting revenues, as per a special audit report, for the assessment years starting from 2006 to 2008. The DoT will send show-cause notices to these operators in this regard. The telecom ministry has arrived at a figure of Rs 550 crore due from RCom, Rs 393 crore from Tata Teleservices and Tata Communications while Vodafone has to pay Rs 245 crore, Bharti Airtel has to pay Rs 292 crore and Idea has to shell out Rs 113 crore, according to sources. The Telecom Regulatory Authority of India (TRAI) in 2009 had asked the DoT to conduct a special audit of the financial accounts of these five telecom companies for the 2006-08 period, observing that the operators were misreporting their revenues to avoid payment of license fee to the government through revenue share. Expect some negative action in the telecom packs today.

According to Business Standard, Adani Power has been shortlisted to develop four overseas projects in Kosovo, South Africa and Nigeria worth nearly Rs 19,000 crore with total capacity of 3,792 MW. In Kosovo the company has bid to develop a new re-power plant, a 600 MW project that can be increased to 1,200 MW. The company is also in the race for developing a 600 MW plant in South Africa, besides two other projects in Nigeria, having a total capacity of 1,992 MW. A leading thermal power producer, Adani Power currently has an installed capacity of 3,330 MW and intends to ramp it up to 20,000 MW by 2020. This is a positive development for the counter.

According to sources, Hindustan Zinc has decided to cut zinc prices by Rs 800 per tonne to Rs 1,14,500 and has also reduced lead prices by Rs 1,300 per tonne to Rs 1,22,600. This is negative news for the stock as a cut-down in prices indicates a downward revision of revenue visibility going forward.

According to Reuters, Bajaj Auto launched its first-ever four-wheeled vehicle yesterday, saying the RE60 would target commercial users and three-wheeled vehicle owners in India, and that the production could involve Nissan and Renault. The unveiling of the four-seater RE60 ended months of rumours that have buzzed around India’s auto industry on the nature of the vehicle, which promises low carbon emissions and fuel efficiency. The RE60 will be manufactured in Bajaj’s plant in Aurangabad in western India, and will be made available to customers in the next few months. In wake of the heavy beating down that the shares of Bajaj Auto received on the bourses due to its lower than expected monthly sales number, this news of a four-wheeler launch will work as a positive platform for the stock today.

According to Economic Times, its is believed that the Adani Group and state-run oil companies like OIL and GSPC have signed confidentiality agreements to bid for the controlling stake of the BG Group in India’s biggest private sector city gas distribution venture Gujarat Gas Co (GGCL). The BG Group is aiming to sell off its entire 65.12 per cent stake in GGCL. This has led to an erosion of the company’s market capitalisation on the bourses over the past few months. The company has also been suffering on account of the rising dollar against the rupee and high LNG prices. However, this stake sale development presents a great investment opportunity and we advise readers to give it another positive look. Expect some positive action in the scrip of GGCL today.