Index Trends And Stocks In Action for 28th January 2013

The Indian market registered its biggest gain in the past seven trading sessions on Friday on the back of buying in rate-sensitive sectors such as banking, realty and auto on expectations of some monetary easing by the Reserve Bank of India early next week.  The Nifty closed in the green at 6075, up by 0.92%. It has witnessed a range bound trading over the last couple of weeks where the lower range stands at 5990 and the higher range stands at 6100. Going ahead a crucial resistance stands at 6095 and 6120. A close above 6120 will give a fresh breakout. On the downside, the support for the Nifty stands at 6060 and 6020.

A flagship of the the RPG Group, Ceat, has signed a joint venture agreement with A K Khan & Company, a Bangladesh-based business house, to set up a tyre manufacturing facility in Bangladesh. It will invest a total of Rs 355 crore for this and the facility is expected to commence operations by the end of 2014. The total capacity of the plant would be 110 metric tonnes per day. The stock is likely to witness an up move following this news.

Sesa Goa is expected to start production at its mine in Liberia in early 2014. The company seeks to offset the negative impact of a mining ban in force in the states of Goa and Karnataka by depending on its mining properties in that country. Sesa has completed 4800 meters of drilling at the Liberian site as of December last year. Its initial production target from the mine is 4 million tonnes per annum (MTPA). The stock which has been trading quite weak for some time now is expected to see some action following this announcement.

According to media reports, Ashok Leyland is planning to offload its stake in few of its subsidiaries and also in Induslnd Bank. The disinvestment will help the company to reduce its debt which is currently around Rs 3500 crore. The proposed stake sales would bring in around Rs 500 crore over the next 12 months for the company. The process is expected to start once the merger of two of its associate companies Ashley Holdings and Ashley Investments with Ashok Leyland are completed. We expect the stock to be in focus for the day today.

Maruti Suzuki has purchased land in Gujarat for its fourth plant. It intends to double its annual production capacity to about 3 million units. It has purchased this land for its new factory which will have a capacity of about 750,000 units a year. The company has also reported that it is to begin work by on its third plant in Mehsana district and also in Gujarat in March and production from these plants would start 2015. The stock of Maruti is expected to further gain momentum from these news items. Remember, its good results have already set the stock rolling on the higher side.

Among companies to be watched for today are Adani Power, Amara Raja, Bank of India, Birla capital, JSW Steel, State Bank of Mysore, State Bank, Whirlpool, Torrent Power, Tata Teleser, ING Vysya Bank, KPIT Cummins, Phoenix Mill as these companies are to announce their Q3FY13 results.