Stocks In Action For 4th July 2012

The Hindu Business Line has reported that Grasim Industries may be forced to shut its MP plant due to the water shortage. The delay in monsoon has been the reason in the inadequate water supply. It faced the same problems last year. The production has already been cut and company said that the normal production will start only when there is sufficient water available.

Telecom stocks such as Bharti Airtel and Idea Cellular may show some volatility after the split verdict by the court on 3G roaming pact.

According to media reports, Steel Authority of India (SAIL) will sign the final pact with Japan’s Kobe Steel next week for a joint venture which will set up a facility to produce iron nuggets at an investment of Rs 1,500 crore. The joint venture would use Iron Making Technology Mark-3 (ITmk3) for producing iron nuggets from iron ore fines and non-coking coal to use in steel-making electric arc furnaces (EAFS). The technology would be provided by Kobe Steel. A detailed project report is being jointly prepared by the two companies for setting up the 0.5 MTPA facility at SAIL’s alloy steel plant (ASP) in Durgapur. On the back of this news one may see volatility in the share price of SAIL in today’s trading session.

According to media reports, GTL Infrastructure has set up a committee to restructure its outstanding dollar convertible bonds due in the latter part of the year. The company has about USD 228 million worth of foreign currency convertible bonds maturing on November 29. GTL Infra will have to redeem or restructure the convertible bonds because of a sharp slump in its shares. GTL Infra yesterday closed higher by a whopping 15 per cent and the stock may see volatility in today’s trade.

According to media reports, the government is considering forming a venture capital fund of Rs 2,000 crore to promote research and development (R&D) in the pharmaceutical sector. Commerce and Industry Minister Anand Sharma said, “We are considering a proposal of venture capital fund of Rs 2,000 crore for the drug industry and are in talks with Exim Bank for this.” On the back of this news one may see volatility in the pharmaceutical space with a positive bias in today’s trade.

Lupin yesterday announced that the company has received FDA approval for its generic Ortho Tri-Cyclen Lo tablets. The tablets had annual U.S. sales of approximately USD 421 million for the 12 months ending March 2012. On the back of this news one may see volatility in the share price of Lupin in today’s trading session.

According to Business Standard, Reliance Power risks losing a bank guarantee of Rs 300 crore after a court said that distribution companies could seek damages from Reliance over a delayed Rs 17,500 crore power project in Andhra Pradesh. Eleven state distribution companies, which have purchase contracts with the unit of Reliance Power developing the 4,000 MW project, have demanded Reliance pay Rs 400 crore or give up a bank guarantee for delaying the project. On the back of this news one may see volatility in the share price of Rpower in today’s trading session.

According to media reports, Brent crude has hovered around USD 100 a barrel for the first time in three weeks as tension over Iran’s oil supply concerns came into focus and investors bet on further policy action to support global economic growth. The crude has moved northwards in the past four to five trading sessions, i.e. from the lows of around USD 89 a barrel to USD 100 a barrel. On the back of this one may see volatility with a negative bias in the scrips of oil marketing companies like BPCL, HPCL and IOC in today’s trading session.