Index Trends & Stocks In Action For 21st February 2013

Indian markets saw a range-bound move yesterday where the Nifty traded in a tight range of 25-30 odd points on either side. It finally ended with marginal gains of 0.06% at 5943. This has been a typical characteristic of the market for the past two months or so where it has been trading in a range without a decisive move on either side. The bounce back we were talking about from levels of 5880 or so has achieved its first target which was at 5970 and the market slipped down considerably from this level. One thing to be noted is that the premium in Nifty February Series Futures has expanded from 5 points to 21 points and Nifty futures have added 2.14 lakh positions in open interest. This accounts for 1.33% of the total open interest in the February Series and indicates that more people were betting on an upside today. Going forward, resistance on the higher side would come in at 5970-5975 levels. If the Nifty sustains above these crucial levels we could see a run up to around 6010-6025, whereas, a strong support for the Nifty will come in at 5920 and 5880 on the lower side.

Today, workers at Maruti Suzuki, Hero MotoCorp and Suzuki Motorcycle will go on a strike as the workers from these companies are supporting the two day strike called by the central trade unions which began yesterday. The production at all these three plants will be closed for today. The central union has put upon 10 demands from the union’s point of view. The stocks will remain in action and trade volatile following this development.

According to the media reports, the Insurance Regulatory and Development Authority has penalized SKS Microfinance to pay a penalty of Rs 50 lakhs for the violation of certain provisions of the insurance guidelines. On the back of this the stock of SKS Microfinance could see a good amount of downward pressure for today.

Escorts has entered into a partnership with an Italian company BCS S.p.A to distribute and sell the speciality Ferrari brand of tractors in India. The first product that is being launched under this partnership is the 26HP model which has all four equal sized wheels, basically made to be used in the vineyards and orchards in India. The stock of Escorts will see a good positive bias for today following this development.

Housing and Urban Development Corporate (HUDCO) is raising up to Rs 2805 crore through the second tranche of its public issue of tax free bonds. The issue will be opening from today and will be closing on March 15, 2013. The issue size is of Rs 500 crore with an option to retain over subscription up to Rs 2805 crore. The company would utilise the issue proceeds for lending purposes, working capital requirements, augmenting resource base of the company and other operational requirements. On the back of this news, we expect to see some volatility in the stock prices of HUDCO for the day today.

Rural Electrification Corp (REC) yesterday announced that company will be raising Rs 100 crore through an issue of tax-free bonds. The proceeds would be utilised for the lending operations and to meet debt obligations. The issue shall open for subscription from February 25^th and remain open till March 15^th, 2013. The face value of the bonds shall be Rs 1000. On the back of this news we expect to see some volatility in the prices of REC for the day.

One stock to watch from the IT sector for the day is Infosys. The company yesterday announced the launch of a new analytics platform called BigDataEdge. According to the company, this new platform will simplify the complex task of analysing Big Data to discover relevant information. With the help of this analysis enterprise can reduce the time taken to extract information by up to 40% and at the same time it can generate insights of the company eight times faster. On back of this development we expect the scrip to remain in focus for the day.