Index Trends and Stocks In Action for 26th December 2012

Market on Monday closed with marginal gains. The Nifty moved in a tight range of 20-25 points and volume were lower than average as there were no major triggers from global markets ahead of holidays. It closed flat at 5856. Going ahead the Nifty has a strong support around levels of 5820-5830. If it breaches its support level then the bias would incline towards the negative side and the Nifty may touch levels of 5780 and 5750 and on the other side. The Index may face some resistance around levels of 5871 and 5890.

Transport Corporation of India (TCI) is going to invest Rs 150 crore in expanding its operational presence. It intends to do so in order to cater to the expected growth in demand resulting out of the allowance of foreign retailers to set shop in India. Of the planned amount of investment, Rs 60-70 crore would be used for the creation of new hubs across the country, Rs 40 crore on trucks and Rs 25 crore on buying a new ship. The unveiling of these plans will lend a good positive bias to the stock today.

Mahindra & Mahindra (M&M) was supposed to invest Rs 1800 crore in the development of a testing facility in Tamil Nadu. However, it has been facing delays on this front since the government is yet to allot land. To compensate for this, the company has begun testing on a smaller scale at a different location. However, this cannot be a feasible long term option. The stock price of M&M is likely to see some pressure today.

It has been reported that 3 state-run firms, MOIL, NMDC and Rashtriya Ispat Nigam are looking to acquire iron ore assets in Brazil. Business Standard reports, that apparently, NMDC has already started due diligence in a couple of mines in the Amapa province. The steel authority has been in talks with the Brazilian government to find potential acquisitions for the other two companies. The stock prices of MOIL and NMDC are likely to see volatility with an upward trend today.

The Competition Commission of India (CCI) approved the proposed sale of a few of Orchid Chemicals and Pharmaceuticals’ (OCPL) assets to Hospira Healthcare. Among these assets are OPCL’s Betaculum API business along with its manufacturing facilities, manufacturing facility in Aurangabad and R&D facility in Chennai. This would result in volatility in the stock price of OCPL today.

The CCI has accorded its approval to Aditya Birla Nuvo to acquire a majority stake in Kishore Biyani led Future Group’s Pantaloon brand. The former would invest Rs 1600 crore in the Pantaloon brand which would be later demerged to be listed as a separate entity. This is likely to result in volatility in the stock prices of both, Aditya Birla Nuvo and Pantaloon Retail.