Stocks In Action: December 12, 2012

Tata Communications has cut down 300 jobs worldwide as part of its efforts to align strategy with current business prospects. Although the company has a total headcount of approximately 7500, in front of which 300 appears to be a rather small number, investors are likely to closely watch developments in the business and the market conditions that it operates in. The stock price of Tata Communications is likely to remain volatile with a negative bias today.

Kingfisher Airlines said yesterday that it is in talks with Etihad Airways for a stake sale. It is looking forward to raise money in a bid to get out of its troubles. Stock prices yesterday saw an upward movement of 4.96% due to media reports indicating that a deal would be announced next week. However, the company post market hours has denied such a development and this is likely to keep the stock highly volatile with a downward bias for today.

For long, there has been an ongoing natural gas leakage at ONGC’s Krishna Godavari basin. Yesterday the government said that this has been brought the leakage under control. According to Business Standard, ONGC is targeting to produce 0.982 million tonnes of oil and 5.92 billion cubic meters of gas by 2020-21. Following these developments, the stock price of ONGC is likely to see some upward movement today.

The government has a decided on a price band of Rs 145-150 per share for selling a 10% stake in NMDC which is to be held today. The scrip saw a high amount of volatility yesterday and closed the day up by 2.94%. Although the price band is lower than the current market price of NMDC, markets have taken the move positively with a general consensus that it is being sold at a discount. Stock prices of NMDC are likely to see volatility today as well.

Banking stocks came under pressure yesterday as the Banking Laws Amendment Bill was not passed due to the Lok Sabha adjournment. With hopes of this bill being passed in the lower house, banking stocks are expected to remain volatile today. The directional movement of these stocks would be dependent on the developments taking place in the parliamentary session.