Index Trends & Stocks In Action For 28th March 2013

The Indian markets ended their seven-session losing streak on Tuesday as defensive stock provided some respite. The Sensex rose mildly on Tuesday, rebounding from a four-month low and the Nifty ended at 5642, up by 8 points. In our last write up, we mentioned that 5610 is a strong support level for the Nifty and what we witnessed on Tuesday was a low of 5612 on the Nifty followed by a small pull-back.

Having analysed the daily charts of the Nifty we feel the markets have bottomed-out for the short-term as the markets have come close to levels of 5610-5630 at many instances. Despite strong downward momentum, the markets have failed to break through this zone.  On Tuesday we saw a white candlestick after seven sessions. This means the bears have now worn-out and we may see a pull-back in the markets.  On the downside, 5610 will prove as the next key support and if that is broken we may see havoc in the market. On the upside, an immediate hurdle for the Nifty stands at around 5660-5700. We feel the expiry will end in the range of 5600-5700.

Visa Steel is seeking an allotment of 675 acres of land at its steel plant at Kalinganagar in Jaipur for capacity expansion. The company currently holds 475 acres here and operates a 0.55 million tonne per annum (mtpa) steel plant there. It needs the land to additionally ramp this capacity up to 2.5 mtpa. It is estimated that this expansion would cost the company around Rs 9000-10000 crore. This is likely to result in some upward movement in the stock prices of Visa Steel today.

IRB Infrastructure Developers (IRB) has signed an agreement with the National Highways Authority of India (NHAI) for four-laning of NH-17. The project that extends from the Goa-Karnataka border to Kundapur is estimated to cost Rs 2600 crore. The construction is likely to be completed in 910 days and the concession period is to be 28 years. The company has sought a grant of Rs 536.22 crore from the NHAI for the execution of this project. The stock prices of IRB Infrastructure Developers are likely to see some upward movement today.

Educomp Solutions has sold its entire 50% stake in Eurokids International for an undisclosed sum. The stake sale to a group of investors led by GPE India is said to have made three times its original investment for Educomp Solutions and a profit of approximately Rs 70 crore. The company is making an effort to transform its business and concentrate on core assets. It has been well on the way of this transformation and thus the stock prices of Educomp Solutions are likely to trade with an upward bias today.

Hindustan Motors has struck a deal with IndusInd Bank for the provision of trouble-free financing facilities to the former’s customers across India. The tie-up will entail the provision of financing to rural and semi-urban areas at competitive interest rates for both commercial vehicles and passenger vehicles. On this development, we expect the stock prices of IndusInd Bank to see a mild upside today.