Index Trends & Stocks In Action For 14th February 2014

Indian markets on Wednesday touched an intraday high of 5970 but pared some gains towards the end. The Nifty ended the day, up by 0.18% at 5933.  If we evaluate the daily chart of the Nifty we have a mixed chart formation which signals a reversal pattern for 11^th and 12^th February and at the same time a bearish candle for 13^th February where the market failed to sustain the opening levels and closed below the last trading days’ close. Going ahead, traders would be looking at the January WPI data which is due tomorrow. This is likely to decide the stance of the RBI’s monetary policy going forward. Key support for the Nifty is around 5920 and 5880 level. On higher side, we may see resistance coming around at 5970-6020 levels.

According to media reports, the Kinetic group has completed its restructuring as was planned. Accordingly, the two-wheeler business of Kinetic Motor Company was to be merged with the automotive components arm, Kinetic Engineering. The group has also received approval from the RBI for extension of conversion or redemption of USD18 million FCCB till February 2014. Promoters’ stake in KEL would be reduced to 53 per cent from 57 per cent earlier. Stocks of both, Kinetic Motor Company and Kinetic Engineering are expected to remain in focus today.

GE capital has exited from the mortgage business in the country by selling its housing finance company and entire mortgage portfolio to the Magma group. With this new move, the company is planning to focus on the growing commercial finance and credit card joint venture. Magma has also purchased the entire home loan and home equity portfolio of GE Money Financial Services. The stock of the Magma group could see a positive move following this development.

Tata Chemicals has announced the merger of its Mauritius-based wholly owned subsidiary Homefield International with itself. The entire assets and liabilities of Homefield international are to be transferred and vested in Tata chemicals and all the shares would be cancelled. The company has already clarified that no shares will be issued and allotted in lieu or exchange of the equity shares of Homefield International.  The stock of Tata chemicals is likely to be in limelight for today following this development.

In the power sector the stock to watch for is NHPC, as it plans to take up three thermal power projects. These projects include the 1320 MW Rewa Thermal project in Madhya Pradesh and two other projects at Lakhi Sarai and Pirpainthi in Bihar. All these projects are to be executed as joint ventures with the state government.

Among the major companies to announce their results today are Aditya Birla Nuvo, CRISIL, DLF, Dr Reddys Laboratories, Elder Pharma, GAIL, GVK Power, HDIL, LIC Housing Finance, Suzlon Energy, Tata Motors and Videocon Industries. We expect volatility in these stocks depending on the numbers they post.