Index Trends & Stocks In Action For 16th April 2013

The Indian markets edged higher yesterday, recovering from seven-month lows after slowing inflation and lower crude and gold prices led to hopes that the RBI will cut interest rates. Buying was seen in Oil & gas and Banking stocks. The Nifty rose 40 points to end at 5568. The Nifty once again made an attempt to cross its hurdle of 5600-5630, but could not move above this hurdle as traders and investors have been exiting positions on every rise. Going forward the Nifty will face resistance at levels of around 5600-5630. In case the Nifty manages to sustain above this level, we can see a sharp pull-back to higher levels coupled with some short covering. On the downside, the Nifty has strong support at levels of around 5530-5500.

Shares of Reliance Industries may show some gains ahead of its results expected today. The market overall expects earnings to come better as a result of a good show by its refining and petrochemical business. In the December quarter the company had surprised the markets by reporting a net profit of Rs 5052 crore. The GRMs in the December quarter have improved significantly and hence a better result is on the cards.

Investors would also see a rally in power stocks today, especially in Tata Power, Adani Power and Reliance Power. CERC has allowed Tata Power to recover the higher fuel costs from the state power utilities through means of compensatory tariffs. CERC had also passed such an order in the case of Adani Power. This move is likely to result in upward movement in the above stocks.

According to media reports, Kalpataru Power Transmission’s subsidiary, Shree Shubham Logistics has signed an agreement with Tano India Private Equity Fund II for raising an amount of Rs 80 crore to fund its capacity expansion plans. The agro-logistics player will be expanding warehousing capacity in the states of Rajasthan, Madhya Pradesh and Maharashtra. Based on this, stock prices of Kalpataru Power Transmission are expected to see some upward movement today.

Uttam Galva Steel is in talks with South Korean steel major Posco to set up a three million tonne per annum integrated steel plant at Satarda in Maharashtra.For the project, Uttam Galva Steel has earmarked around 1700 acres of the land it owns at Satarda for the project. Upward movement is likely in the stock prices of Uttam Galva Steel today.