Index Trends and Stocks In Action for 4th January 2013

Market on Thursday opened with a gap up and thereafter traded in a tight range of 20 points. The Nifty, for the first time since January, 2011 closed above the magical mark of 6000 points. It closed at 6010, up 0.27% yesterday. The index has a formed Hanging man candlestick pattern as on the 3rd of January, 2013, which is a top reversal pattern. After a good run in the New Year, it may enter a consolidation phase or see some profit booking in the coming days. The Resistance level for nifty stands at 6015 and 6050 while Support could come in at 5965 and 5900.

JSW Steel, which is among the top three steelmakers in India, will hike prices by about 2%. This increase is prompted by rising inputs costs and will be effective from Thursday. The Company hasn't increased prices in the last three months while in the international market steel prices have increased significantly. This price hike could see steel prices from JSWS rise by around Rs 750 per tonne. This would have a great impact on the revenues of the Company.  One may expect some positive movement in the stocks of JSW Steel for today following this development.

Jet Airways is yet to get regulatory clearance for its proposed partnership with Abu Dhabi-based Eithad Airways. The Civil aviation ministry has said, the deal between the two airlines will be concluded in 10 days with Eithad picking up a 24% stake for Rs 1500-1800 crore. The complexities involved in the deal, are reasons for the delay in the conclusion of it. We expect the stock price of Jet Airways to remain in the positive for today following these announcements.

Leading infrastructure firm, Punj Lloyd has planned to buy the constuction businesses of Macmohan Holdings of Australia through its wholly subsidiary Sembawang Austraila Pty. The offer has been made in two parts. In the first part it intends to purchase Macmohan's construction business either as a  'going concern or as a separate  standalone offer' while for the second part it will make 'a counter proposal to the asset purchase agreement made by Leighton Holdings on identical terms for an additional consideration of AD 5 million’. The scrip is excepted to witness a positive move today.

Gold loan firms such as Muthoot and Manappuram hope for a still higher LTV (Loan to value ratio),  which has already hit a 52-weeks high.  Stocks of both these companies were trading higher yesterday. The proposal to increase LTV and use of high value transactions are positive for both these companies. Stocks of both the companies are expected to remain volatile today.