Index Trends & Stocks In Action For 10th April 2013

The Indian markets plunged to fresh seven-month lows on Tuesday with Information Technology shares losing ground on concerns of uninspiring earnings reports which will start coming in a few days. The Sensex fell about 350 points from the day’s high, owing to a sell-off by foreign investors who are now reallocating their flows to other attractive markets. The Nifty ended at 5495 declining 48 points. We have mentioned earlier too that the markets are in a downtrend and every rise is an opportunity to sell. The Nifty has closed below all its major support levels. The index will probably consolidate in the zone of 5440-5520. For today, 5470 is an important support level with the next support coming in at 5440. On the upside resistance for the Nifty comes in at 5520-5530.

According to media reports, Pearson has acquired a 50 per cent stake held by Educomp in IndiaCan for an undisclosed amount. Pearson now becomes the sole owner of IndiaCan which way back in 2009 was  set up as a 50:50 Joint Venture between Educomp and Pearson. The company provides vocational training across India. The Educomp stock is likely to see some volatility today following this development.

Oil and Natural Gas Commission (ONGC) yesterday signed a Memorandum of Understanding with the KK Birla Group company, Chambal Fertlisers and Chemicals. Accordingly it will set up a plant to manufacture around 1.3 million tonne of fertilisers per annum at a cost of Rs 5000 crore. The project is to be completed by 2016 and this news could see the ONGC stock remain in focus for today.

The completing of L&T’s alumina refinery and smelter project in the state is under suspension. The smelter complex with a capacity of 1.5 mtpa was to come up near Sambalpur. L&T with Dubai Aluminium had proposed to invest Rs 30000 crore on a 3 MTPA alumina refinery, 1.5 MTPA smelter project and a CPP. The refinery project was established in Raigad district on about 4000 acres of land.  The stock is likely to remain under pressure following these new developments.

According to media reports BHEL and NTPC are in talks to form a joint venture to put up a 100 MW  power plant based on a new technology. The technology that is being used is three times costlier and will take about Rs 12 crore per MW of establishment. The project will cost Rs 700 crore and the cost will be equally shared between BHEL and NTPC. We expect the two scrips to remain in limelight for the day.

Gujarat State Petroleum Corporation (GSPC) has sought imported LNG price of USD14.2 per mmBtU for the natural gas it plans to produce from KG basin fields by year end. Industry sources have reported that the company on Friday had submitted a proposal for a pricing of 5.24 million standard cubic meter per day. The GSPC stock is likely to remain in action for today following this development.