Index Trends and Stocks In Action for 18th January 2013

Markets reversed preceding day losses to end higher supported by buying seen in OMC stocks after the government announced a partial deregulation of diesel prices.  The Nifty ended on a positive note and closed up by 0.62% at 6039. The near support level for the Nifty comes at 6020 and far-off support is at 5970. On the upside, the index may face resistance around 6055 and 6070 levels.

Hero MotoCorp announced its Q3FY13 results post market hours yesterday. The results were disappointing given the fact that volumes declined by 1.02% in the quarter as compared to the corresponding period last year. Revenue grew rather moderately by only 2% to Rs 6151 crore. Margins took a major hit because of higher input costs, changed product mix and higher advertising expenses. With this, the net profit declined by 20% to Rs 488 crore. Stock prices are expected to see a major decline today.

Exide Industries also announced its Q3FY13 results post market hours. Although it posted good volume and revenue growth, margins were heavily hit. Margins took a toll because of an increase in lead prices combined with the depreciation in the rupee. All this saw revenues grow by 17.34% but the net profit margin declined by 168 basis points to 10.04%. Stock prices are expected to remain volatile today.

TCS said that it has been selected as a global IT partner aimed at consolidating Nokia’s global internal applications suite with a single provider. The company’s core applications for enterprise resource planning (ERP), customer relationship management (CRM), product lifecycle management (PLM), supply chain management (SCM), enterprise information management (EIM) and corporate functions (COF) will be supported and developed by TCS across the world, said the press release. Although the size of the deal has not been revealed, stock prices of TCS are expected to be volatile with an upward bias today.

Of the major companies that are to announce their results today are Reliance Industries, Blue Star, HDFC Bank, Hindustan Zinc, IDBI Bank, ITC, Mahindra & Mahindra Financial Services, MindTree and Wipro. The stock prices of these companies are expected to be volatile today. The directional trend of these stocks will be dependent on the expectations around these results and the financials they post.