Stocks In Action, 15 October 2012

Reliance Industries Limited ha cut capital investment on the main oil and gas fields in the KG-D6 block by over $3 billion on back of an unexpected drop in reserves according to Business Standard. This is expected to make the stock price of RIL volatile today. Moreover, RIL is also to announce Q2FY13 results adding to the volatility.

With the festive season on the brink of start, automobile stocks are expected to start doing well and performing better than other sectors. The much troubled industry is likely to gain momentum in terms of sales. The sector has been looking forward to a trend reversal and larger expectations over a rate cut are also likely to add to this positive sentiment. Maruti Suzuki India Limited, Tata Motors and Mahindra & Mahindra are to launch new models this week. This would bring about some upward movement in the above stocks.

Kingfisher Airlines called for a meeting with its engineers and pilots today. This is being seen as a make or break meeting by the street. The debt ridden airline has to submit a viable business plan to the civil aviation regulator if it wants to start flights by 21 October 2012, according to Economic Times. What turns out of the meeting with these striking employees will be crucial in determining the movement of this stock. However, the stock would remain volatile ahead of the meeting.

Pantaloon Retail said that it would work on improving profitability and reduce debts by consolidating its business operations in the top 16 cities and a surrounding network of secondary cities, exiting from smaller cities that don’t fit into this network, according to Mint. This would result in an uptick in the stock prices of Pantaloon Retail.

Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have sent separate letters to the department of telecommunications (DoT), asking the government to bear the entire burden of nearly Rs 11,000 crore they need to fork out as one-time payment for additional spectrum. Both say they are in serious financial trouble and do not have the money required but they do need the additional spectrum to “serve their customers”, according to Business Standard. The stock price of MTNL is likely to see volatility today.

Companies announcing their Q2FY13 results today are likely to see volatility today with the market direction depending on how the results are as compared to expectations. Among the companies to announce results are Axis Bank, CMC and RIL.