Index Trends & Stocks In Action For 4th June 2013

The Indian markets continued to remain in the grip of the bears on Monday, amid weak global cues. They were also weighed down by profit-taking in Oil& Gas shares along with rate sensitive indices of banking and automobiles. The Nifty ended the day lower by 47 points at 5939.

In our last write up, we mentioned the Nifty has crucial support at levels of around 5910-5940. In line with this, we saw the Nifty make a low of 5916 and bounce back to close at 5939 yesterday.

Going ahead 5910 will remain a crucial support level for the Nifty. If we break 5910, we could see correction in nifty to the extent of 40-50 points. On the higher side, 5980 will act as stiff resistance.

Wipro has acquired a minority stake in Axeda Corporation, a leading provider of cloud-based service and software for managing connected products and delivering machine-to-machine applications. This partnership will benefit Wipro in using Axeda’s ability to develop machine-to-machine applications and use it with Wipro’s big data analytics capabilities to market rapidly and in a cost-effective manner. Stock prices of Wipro are expected to see upward movement today.

Hero MotoCorp said post market hours yesterday that it sold 557890 vehicles in May 2013. It had sold 556644 units in May 2012. This marks a growth in sales figures of 0.22% year-on-year, which is rather unimpressive. In anticipation of poor numbers, Hero MotoCorp fell by 3.65% in yesterday’s trade. The stock is expected to see volatility today with the announcement of a flattish trend in sales in May 2013.

State run, Steel Authority of India (SAIL) yesterday said that it has clocked its best ever steel production in May this year. SAIL reported a total production of 1.087 million tons (MT). The crude steel production was at 1.152 MT which is also the highest so far. The production of value added and special steel increased by 8% during the month. On the back of this positive news, the stock may trade with a positive bias today.

According to news reports, the oil ministry has asked RIL to divert part of the gas allocated to Rashtriya Chemicals and Fertilizers (RCF) to power plants based in Andhra Pradesh. Power plants in this state have been running on very high utilisation rates and supply of gas would mean a lot to these fuel trapped power companies. Some positive action on power companies such as GVK Power and Infrastructure, Lanco Infratech and GMR Infrastructure would be expected on the back of this news.

NYSE Euronext is considering a fresh bid to sell its nearly 5% stake in Multi Commodity Exchange (MCX), after an earlier attempt failed in March this year. NYSE Euronext, which runs leading bourses in the US and Europe, holds 4.79% stake in MCX and its stake is currently valued at over Rs 200 crore. NYSE Euronext will soon make a fresh attempt to sell its stake, either in part or full, depending on the market conditions. Stock prices of MCX are expected to be volatile today.

Usha Martin has signed a technical assistance agreement with leading Japanese speciality steel and forging company Aichi Steel Corporation to improve its production efficiencies and utilise its facilities to produce higher value steel products. Usha Martin is expected to trade with a positive bias today.

Global credit rating agency Moody's has placed debt ratings of 11 banks, including SBI, ICICI Bank, HDFC Bank and Axis Bank, under review because of the updating of its methodology. The subordinated and junior subordinated debt ratings of these banks have been placed under review in the wake of the methodology update. Other banks are Bank of Baroda, Bank of India, Canara Bank, IDBI Bank, Indian Overseas Bank, Syndicate Bank and Union Bank of India.