Index Trends and Stocks In Action For 15th January 2013

The Indian markets traded firm on Monday after December WPI eased to 7.18% against expectations of 7.40% and the government deferred the General Anti-Avoidance Rules (GAAR) by two years. The Nifty ended higher by 71 points at 6024. Going ahead, 6050 on the higher side is an important level, which will act as a stiff resistance for the index. A sustained move above 6050 will help bulls take the Nifty to the 6100 mark. Immediate support for the Nifty stands at 5975 and 5935 on the down side.

Mahindra and Mahindra has increased its production capacity in some of its Indian brands. It will hike capacity for models like Quanto, XUV500 and Rexton in a bid to bring down the waiting periods on these vehicles. It has also added more booking centers for the three products to cater to the higher demand. The capacity for Quanto has been raised to 3500 units while that for the XUV500 has been pushed up to 4500 units. Following the shift and increase that it has put in place, it will now produce 500 units of Rexton per month. Based on these developments, we expect the M&M stock, which is already seeing a good momentum based on news flows to continue to trade on the ihger side.

Hero Motocorp intends to invest Rs 550 crore in setting up a new Global Parts Center(GPC) at Neemrana in Rajasthan. This will provide direct employment to over 1000 people and have an installed capacity of 7.50 lakh units per annum. The GPC is expected to be operational in the third quarter of the next financial year (2013-14) and will initially employ 400 people. The stock of Hero Motocorp is likely to remain the limelight following this development and will probably trade in a bullish range for today.

Crompton Greaves is acquiring the Compact Fluroescent Lamp (CFL) manufacturing business of Himachal Pradesh-based Karma Industries. The acquisition will double Crompton’s capacity in CFLs. We expect the stock of Crompton Greaves to remain volatile with a positive bias for the day following this announcement by the company.

Maruti Suzuki has introduced a refreshed and upgraded version of WagonR priced upwards of Rs 3.58 lakh (ex-showroom, Delhi). This Rs 10000 more (across variants) than the outgoing version.  Between April and November of FY13, the Wagon R has sold an average 11000 units every month. Hiking prices in a low demand scenario does not look like a good idea and will keep the stock under pressure following this development and announcement.

TCS has announced Q3FY13 results. The company has performed better than expected. Obviously this is one stock that all would watch without exception. Will you get a chance to buy into the counter? Hope for the best.

Watch out for the stocks of Axis Bank, Bajaj Finserve, Development Credit Bank (DCB), Gruh Finance, NIIT Technologies and South Indian Bank among others, as these companies are scheduled to announce their Q3FY13 quarter numbers.