Index Trends & Stocks In Action For 13th May 2013

Indian markets ended firm on Friday extending to a fourth straight week. The industrial production data which came in at a better-than-expected 2.5% cheer investors and traders. Auto stocks were in limelight as the index surged almost 2% while Maruti Suzuki surged to new 52 week high. Technically nifty formed a long bullish candlestick on Friday which indicates that buying is more aggressive and traders and investors are covering their short positions as sentiments are favoring the bulls. Nifty continues to remain in uptrend as the 20-DMA crossed the 50-DMA. The only major worry is the markets are in overbought zone, therefore profit-taking cannot be ruled out. Nifty on upper side may face resistance around 6125-6150 for intraday whereas support is likely to come around 6070-6050.

Public sector lender Allahabad Bank aims to bring down its gross non-performing assets (NPAs) level to around 3.2 per cent from the last fiscal's level of 3.92 per cent on the back of sustained effort on recovery.

In the first such move since RBI cut its key rates last week, state-run IDBI Bank cut its fixed deposit rate offering in two maturities by up to 0.50 per cent. The rate cut is a "considered response to the signals emanating from RBI's monetary policy," a statement from IDBI Bank said.

Emboldened by the steps taken by the government to get diesel prices in sync with the crude price, private refiner Essar Oil is planning to ramp up its retail network by adding around 50 new franchisees and five company-owned outlets this fiscal, a senior official has said. "We will add 40-50 franchisees by the end of the fiscal if the diesel prices continue to get increased and the differential between the state-owned oil marketing companies and private players' prices goes down," chief executive for marketing S Thangapandian told reporters over the weekend.

DLF plans to sell about 81 million shares to institutional investors on May 14, 2013. The company will sell shares at a price band of Rs 222 to Rs 223 per share raising up to 18.9 billion rupees. Shares of DLF closed at Rs 237.05 per share on Friday. Some downward pressure to match the price band can be expected today.

Essar oil which came with its Q4 results after the market hours on Friday is expected see some positive sentiment of the investors over the good results. The company has also commissioned a power plant and has also exited the CDR recently. The power plant will reduce its fuel cost and will also improve its EBITDA margins. Essar Oil is looking to reduce its rupee term debt with low interest bearing dollar debt which will act as a hedge against any adverse movement in crude oil prices. Essar Oil is planning to add around 50 new franchises and five company-owned outlets in a move to ramp up its retail distribution network. The company currently has around 1400 operational outlets and it plans to add at least five in this fiscal. Upward movement can be expected in the share prices of Essar Oil today.

Shares of Coal India may show a positive movement over the news that NTPC has started a joint sampling of coal with Coal India. The two PSUs have been in the fight over the quality of the coal as well as a receivables Rs 1000 crore from NTPC. The joint sampling at the moment looks a step forward towards resolving issues between the two Maharatnas.

La Opala has shown a robust performance for the March 2013 quarter. Its top line has witnessed a 30% growth to Rs 40 crore while net profit has doubled to Rs 9.28 crore. EBITDA margins expanded from 19% a year ago to 24% in the Q4FY13. With the robust result, we expect a positive movement in the stock.

IFGL Refractories may show some negative trades as the company has come with a poor set of numbers. Its topline has grown by 10% to Rs 77.62 crore. Net profit however declined by 19% which will be seen negatively by the markets. The stock has already lost 23% in last 6 months and a losing streak may be continued by it.