Index Trends & Stocks In Action For 31st May 2013

The Indian markets ended marginally higher on Thursday amid expiry of the May futures and options series. FMCG major ITC and Mahindra and Mahindra led the gains in the market today. The Nifty ended up 20 points at 6124. The expiry of the May series Futures & Options was more or less stable when compared to last month. The Nifty went to a low of 6072 which was above Wednesday’s low of 6069 thereby continuing its higher tops and higher bottom trend. Now, the crucial level on the downside remains at 6060-6050 and with the GDP data expected to come in today bulls should sustain these support levels.  If data disappoints, and markets break this support level we could go down to levels of 6000-5970. On the higher side 6130-6150 will remain a strong supply zone.

The Coal India board has approved the signing of FSAs with power producers even in the absence of long-term purchase pacts between generation companies and distribution firms. However, fuel supply will start only after inking of the buying agreements. A power purchasing agreement (PPA) is signed between a power producer and a buyer, usually an electricity distribution company.  This development will keep the Coal India stock well in action for today.

Indian Oil (IOC) has reported a 15 per cent growth in net profit at Rs 14513 crore (Rs 12,671 crore) in the fourth quarter of 2012-13. The higher net profit has been attributed to higher subsidy compensation received by the company. IOC has recommended a dividend of 62 per cent that translates into Rs 6.20 for each share. You could see some positive action in this stock following these news points.

According to ICRA, the proposed market-based pricing mechanism for the pharmaceutical industry is expected to impact near term earnings of companies with relatively higher dependence on Indian market. With the National List of Essential Medicines (NLEM) estimated to cover almost 20 per cent of the Rs 72800 crore domestic formulation business, an expected price cut of 15-20 per cent will erode the market by 3-4 per cent.  This data if absorbed by the markets will put pharma stocks under watchful eyes until clarity emerges thereon.

State run company Power Finance Corporation (PFC) which provides funds to the power sector has said that it has plans to acquire a substantial stake in a public sector bank. It has also received an approval from the power ministry for this plan of it. A 'substantial stake' here means to have a board member in the bank. The move is likely to be seen positive for the stock which could react to it in today’s trades.

Vadilal Industries has reported a flat top line of Rs 60 crore in the Q4FY13. The company has reported a loss of Rs 3.07 crore in the quarter against profit of Rs 12 lakh a year ago. The higher material cost has taken a toll on its profitability. Following a poor set of numbers, shares may show a downward trend today.