Index Trends & Stock In Action For May 3rd 2013.

Indian markets continued to be on a roll on Thursday with Nifty closing near key level of 6000 on back of buying in rate-sensitive sectors as banks and Real estate. Today’s up move was on back of cooling wholesale price inflation and sluggish industrial output, the market is almost certain that the RBI will cut interest rate by 25 basis points at its policy review meeting on Friday. Nifty formed Bullish engulfing candlestick pattern, which is bullish in nature. Going ahead traders and investor will take cues from RBI policy. Resistance for nifty will come in around levels of 6030-6050. We feel 5970 will act as a key support for nifty.

Crompton Greaves and PLNE (PT Prima Layanan Nasional Enjinring) have signed a joint venture agreement to manufacture and commercialize High Voltage (HV) and Extra High Voltage (EHV) switchgear in Indonesia. PLNE is an engineering company owned by PLN (Perusahaan Listrik Negara), an Indonesian government-owned Sole Electricity Utility Company.  The joint venture will be owned 51% by CG and 49% by PLNE and will be a part of CG’s global organisation. The estimated market base of HV and EHV switchgear equipment in South-East Asia and the Pacific Region is predicted to exceed $500 million in the coming years. We expect a positive impact on the stock.

Shares of MCX are expected to show some positive bias on the news that the exchange is witnessing rise in the companies listing on its platform. Dabur India got listed yesterday and more are expected to follow the suit. MCX has also waived the listing fees and hence there would be rise in the listed companies which will benefit India's third largest stock exchange.

Today RBI will announce its monetary policy. Most of the rate sensitive counters have already witnessed significant price appreciation and hence RBI's action would impact these stocks. A rate cut of 50 bps in repo rate would take the market higher, while a 25 bps point cut would make the sentiment a bit negative. Even a CRR cut with no repo rate cut would impact the market sentiments. Ahead of this, investors should keep a close watch on the stocks in the Banking, Auto, Realty and Capital Goods sector.

Andhra Bank announced its March 2013 results where it posted a PAT of Rs 344.58 Crore as against Rs 339.67 crore in March 2012. However despite the decent growth in the bottomline, the asset quality of the bank for the March 2013 has actually worsened to 2.45 cent as against 0.91 per cent in March 2012. We feel the results are not quite good and hence the stock may witness a decline on the bourses today.