Index Trends & Stocks In Action for 2nd April 2013

The Indian markets have begun the new financial year on a positive note. Realty Stocks were in the limelight followed by Capital goods and Power yesterday. Mid and Small-caps stocks managed to outperform their larger counterparts. The Nifty closed above the 5700 mark up by 21 points yesterday. Going forward on the upside, the Nifty has a stiff resistance at around the 5725-5730 zone and market needs to at least sustain and close above this zone to ensure that the midterm correction is over and we have a confirmed bottom. Until that happens, every pull back will be resisted and shorting on the rise can be a better strategy. Support for the Nifty will come in at around 5650 and 5620.

According to media reports, IVRCL is to sell its three toll projects in the southern state of Tamil Nadu to TRIL Roads (a Tata Group company). This comes as a part of its strategic plan to monetise its build operate and transfer assets. The value of the deal is yet to be disclosed by the company. We expect IVRCL to react positively on the back of this announcment.

As per a filling with the BSE, Suzuki Motor’s stake in Maruti Suzuki India has gone up to 56.21 per cent from 54.2 per cent. This comes on the back of a share swap agreement to acquire Suzuki Powertrain India Ltd (SPIL). Before its merger SMC held a 70 per cent stake in SPIL. Maruti Suzuki will witness some volatility during the course of the day today.

According to media reports, the GMR group has completed the sale of its 70 per cent interest in GMR Energy Singapore to FPM Power holdings. The transaction was concluded on March 28 after getting all the necessary approvals. Disinvestment of this stake results in a profit of Rs 1376 core for the company and at the same time releases capital amounting to Rs 1564 crore. We expect the GMR stock to react positively to this development today.

According to media reports, GAIL Global (USA) LNG, a US affiliate of GAIL (India) has signed a 20 year terminal service agreement with Dominion Resources to book 2.3 million tons per annum liquefaction capacity in the Cove Point LNG project. Dominion plans to start construction on the 5.25 million tons per annum facility soon. The GAIL stock is likely to see some volatility for the day.