Index Trends & Stocks In Action For 4th February 2013

On Friday the markets closed in the negative for the second straight day on concerns over a slowdown in growth. The HSBC Manufacturing Purchasing Manager Index (PMI) for India fell to 53.2 in January, after surging to a six-month high of 54.7 in December. The Nifty closed below the 6000 mark at 5999. Going ahead support for the Nifty stands at 5975 and 5945. If it manages to hold to the 5945 levels, then the index is likely to witness a pullback to higher levels. On the higher side, resistance sets in at 6020 and 6060.

The management of Hero Motorcorp has finally offered increments to its workers at the Gurgaon factory of around Rs 8500 – Rs 9000 to be given over a three year period. The Company has around 1200 permanent workers at its Gurgaon unit. The average salary of a permanent worker at the unit is currently around Rs 32000 which goes up to Rs 38000 for more experienced employees. The reaching of a settlement in the case sets the stage for the Stock to react positively today.

The offer for sale of shares by power major NTPC will happen in the next eight to nine days. It is expected to fetch Rs 12000 crore to the government. The Government has already completed a 10% stake sale in oil India through an auction, raising Rs 3113 crore. International road shows for the disinvestment of NPTC have already started. We expect the stock to remain volatile with a positive bias to today.

According to media reports, GAIL will be spending over USD 1 billion in buying US shale gas assets. This will be through a new gas sourcing joint venture with French energy trader EDF Trading. GAIL will be signing an MoU with EDF which may lead to the two firms jointly acquiring shale gas assets in North America. It is eyeing relaxation in the LNG export policy of the US before tying up more gas for meeting growing energy demands. This development will keep the GAIL stock in the green for today.

Cera Sanitaryware intends spending around Rs 150 crore on capacity expansion in the next two to three years at its Andhra Pradesh plant. Production for sanitaryware will increase from current 2.7 million pieces to 3 million a year after the completion of this expansion. Also, the manufacturing capacity will go up from the present 2500 pieces to 10000 units a day. The stock of the company is likely to trade well today following these announcements.

Among the companies that are expected to announce their Q3FY13 results today are, J&K Bank, J K Cement, Jubilant Foods, Kingfisher Airlines, Lloyds steel, Tilaknagar Industries,Torrent Cables, United Spirits and Varun Shipping. Stocks of these companies are expected to remain volatile ahead of their result announcements.