Index Trends & Stocks In Action For 23nd January 2013

On Tuesday, the Indian markets overturned early gains and dripped down in the late noon session as Hindustan Unilever disappointed the street with its Q3 numbers. The downward movement was also caused by profit booking seen in the sectors of Realty and Capital Goods, which led the markets to end lower.  The Sensex ended below the magical mark of 20,000 at 19,982 and the Nifty closed at 6049 down by 0.56%. The hurdle for a fresh breakout still remains at 6105. On the down side, a trade below 6035 will try and attempt to touch levels of 5990. We expect the Nifty to trade in the range of 5990-6105 in coming trading sessions. Any break out below or above these levels will show a strong move of 2-3%.

Allahabad Bank announced that it is in the process of implementing a strategy to offload Rs 540 crore worth of Non-performing assets (NPAs). One of the reasons for the recently posted dip of 52% in net profit has been an increase in provisioning for NPAs and diminishing fair value of restructured accounts. Gross NPAs have been a hindrance in the financials of Allahabad Bank. Gross NPA’s went up to 2.98% during the quarter. This has called for attention towards asset quality and this move is likely to cause some upward movement in the stock price of Allahabad Bank today.

Polaris Financial Technology announced its Q3FY13 results today. Although the result announcement was made after market hours, the stock price of Polaris had moved lower by 9.25%. The result was in line with this downward movement. Revenues fell sequentially by 3.76% in USD terms. Margins were affected all the more. The EBITDA margin and net profit margin dropped sequentially by 333 basis points and 223 basis points respectively. This is likely to result in more downward movement in the stock prices of Polaris today.

The government today said that Kingfisher Airlines would not be allowed to fly till it clears all its dues, including pending salaries of its staffers. It would need to obtain statements from creditors, banks, airport operators and employees stating that they don’t have an objection with the resumption of flights. This is likely to result in downward pressure in the stock prices of Kingfisher Airlines today.

Among the major companies that are to announce their Q3FY13 results today are Ajanta Pharma, Havells India, JSW Energy, Karnataka Bank, Novartis India, Reliance Communications and Syndicate Bank. Stocks of these companies are expected to be volatile today. The directional movement in them would be decided by the results they announce.