Index Trends & Stocks In Action For 26th March 2013

The Indian markets continue the downtrend trend with the Sensex touching its lowest level in four months as traders and investors remain alarmed over the future of the Congress-led UPA government after DMK withdrew its support last week and now SP turned up the heat on UPA.  The Nifty closed at 5633 down by 17 points. The markets fell by only 17 points but the range of the candle was about 100 odd points. It registered a high of 5718 and in the late noon trade made a low of 5624. Given that we had this kind of close and a highly ranged bearish candlestick it clearly shows that now it will need some real strong resolution from the bulls to sustain.  Trading-wise, on the down side, we feel 5610 will prove as the next key support and if we breach 5610 the markets may ay test the level of 5570. On the upside, the Nifty may face immediate resistance at levels of around 5660-5670.

Colgate Palmolive announced that its board has approved the selling of its division - Global Shared Services Organisation to Colgate Global Business Services (CGBS), which is Colgate Palmolive’s 100% subsidiary. This transaction would take place for a sum of Rs 59.89 crore and will be effective from June 1, 2013. The sale will ultimately include transfer of all the employees, assets and liabilities. On this development, we expect the stock of Colgate Palmolive to see some volatility today.

According to media reports, Cairn India has planned to invest Rs 10000 crore for exploration and production in the next 2 years. Cairn India is currently processing 175000 barrels per day, accounting for a quarter of India’s production. The company is now looking at producing 500000 barrels per day in the next few years. It plans to drill 100 exploration and appraisal wells at an investment of Rs 3000 crore. On the back of this, we expect the stock of Carin India to react positively for today.

L&T Finance is in talks to purchase Future Group’s stake in its general insurance arm, Future Generali which is currently a joint venture between Italy’s General SpA and Future Group.  The deal is said to be at an estimated Rs 600 crore. Stock prices of L&T Finance are expected to see some volatility for the day.

According to media reports, NTPC is to spend Rs 500 crore for the purpose of Renovation and Modernization (R&W) of its flagship 2000 MW Singrauli thermal power plant in Sonebhadra district of Uttar Pradesh. It is 30 years old and has five units of 200 MW each and two units of 500 MW each. The project would be spread over 3-4 years. On the back of this development, we expect the stock prices of NTPC to see some volatility for the day.

Container Corporation of India (Concor), the largest container operator accounting for 70 per cent of the market, plans to revise its tariffs downwards. The Rail Ministry has decided to lower haulage rates in certain segments by 5%. Since these rates account for about 65-70% of the operating cost, it can now afford to cut on tariffs. We expect the stock prices of Concor to see some volatility for the day.