Index Trends and Stocks In Action for 7th January 2013

Market on Friday opened flat with a negative bias. Thereafter they consolidated and the Nifty moved in a tight range of 25 points. In the last hour of trade, the Bulls tightened their grip and the Nifty registered a high of 6021. At the end of day it managed to close up by .11% at 6016. On a weekly basis, the Nifty registered a gain of 107.80 points. Going ahead it has a strong support at 5982 while the next support stands at 5950. On the higher side resistance is likely to set in at 6050 with the probability of the next level of resistance likely to trigger at 6080.

Dr Reddy’s Laboratories has acquired 80% of the shares in Netherlands-based pharmaceutical company, Octoplus. It acquired 15.9% shares through an open market and 63.5% from certain members of the Octoplus Board and other shareholders through a permanent undertaking. The transaction is expected to be completed by the end of the current financial year.  We expect the stock of Dr Reddy’s Laboratories to remain positive for the day following these announcements.

LIC Housing Finance plans to raise up to Rs1000 crore through External Commercial Borrowings (ECB). The QIP (Qualified Institutional Placement) was delayed due to a variety of reasons, including volatility in the markets. Though the exact amount of the QIP is undisclosed the company is hoping to raise up to Rs1200 crore through the proposed issue of shares. You can expect a positive movement in the stock of LIC Housing Finance following this development.

Leading Steel firms JSW Steel, Essar Steel and Jindal Steel and Power have increased prices of their products by up to Rs1400 per tonne for the current month. Stocks of these three companies will remain much in focus today as it signals a better tomorrow for them on the fundamental side.

Mahindra & Mahindra plans to launch its 300 cc bike ‘Mojo’ next fiscal. The company will also roll out a new model of scooters in the third quarter of the fiscal year. It has invested close to Rs1000 crore in the Research & Development of these products. Following these announcements, the stock of Mahindra & Mahindra is likely to see a positive move today.