Index Trends and Stocks In Action for 31st December 2012

Market on Friday saw a good up move in the last hour of trading and the Nifty managed to close up by 35 points at 5906. It has formed a bullish harami candlestick pattern, which is bullish in nature. But the volumes were on the lower side as compared to the previous day. On Friday, Global markets turned bearish on loosing hopes of US Fiscal deal. Expect a Volatile trade to start on Monday. Going ahead the Nifty’s strong support levels around 5820-5830, are intact.  If it breaches its support levels, then the bias turns bearish and it may touch lower levels of 5770 and 5745. On the other hand, the resistance for Nifty stands at 5935-5960 levels. It needs to sustain above its resistance levels to reach the magical mark of 6000.

According to an Economic Times report, steelmaker Uttam Galva, which has officially taken over the ailing Lloyds Steel, has stated that it is hopeful of turning around the loss-making firm within a year. It was also open to getting in strategic partners in or loom for capital infusion by private equity in the company in future. Lloyds, which will be renamed as Uttam Value Steels has a capacity of 1 million tonnes per annum (MTPA), and has been reporting losses in the last two years. The company has a long-term debt of about Rs 441 crore. The management has also stated that, Lloyds is highly underleveraged and it was looking at raising Rs 1500 crore from public sector banks to meet its working capital needs. This could bode well for Uttam Galva Steel as well as Lloyd Steel. One May expect positive movement in both these stocks today.

Ambuja Cements has announced expansion plans for its Sankrail (West Bengal) grinding unit. The Sankrail plant’s expansion programme includes an investment of Rs 325 crore which would take its capacity from 1.5 million tonnes per annum to 2.4 million tonnes per annum. The whole expansion will be funded through internal accruals. Though the capacity addition is a positive news, we expect the stock price of Ambuja Cementd to remain stable today.

Godrej Properties, the real estate development arm of the Godrej Group, has entered into an agreement with Ratnaraj Blessing Milestone to redevelop a private society in Mumbai. Godrej Properties (GPL) through its wholly-owned subsidiary Godrej Projects Development Pvt Ltd (GPDPL) has entered into a development management agreement with Ratnaraj Blessing Milestone to redevelop a private society at Currey Road in Mumbai, GPL said in a filing to BSE. The project with nearly 120,000 sq ft of saleable area is expected to start soon. We expect a positive movement in the stock.

Thomas Cook India is exploring opportunities to expand its business beyond travel and foreign exchange services through acquisitions. The management has stated that, "We will look at a variety of opportunities related to travel, and therefore, aligned in our vision. We will broaden the scope of our search rather than saying it will only be a travel company," Madhavan Menon, managing director, Thomas Cook India, told Business Standard. The company would look at services areas to grow its business, but ruled out any investment plan in asset-heavy sectors such as hotels.  The scrip is expected witness a positive move on the bourses.

According to statistical data provided by Government of India, the country's mineral production grew by 16.6 per cent in October to Rs 16975 crore led by coal and iron ore. India had produced minerals, excluding atomic and minor minerals, worth Rs 14555 crore in October last year, an official statement said. The contribution of crude petroleum was the highest at Rs 5850 crore. Coal was the second-largest contributor at Rs 5067 crore followed by iron ore at Rs 2418 crore and natural gas at Rs 2130 crore. Lignite contributed Rs 361 crore to the total value of the mineral production and limestone brought in Rs 338 crore. We expect a positive movement in stocks like Coal India and Neyveli Lignite following these developments.