Index Trends & Stocks In Action For 7th June 2013

The Indian markets on Thursday saw a smart recovery in the afternoon session but could not sustain it in the last hour of trade, losing marginally at close as profit booking was seen in heavyweights like Reliance and Infosys. The Nifty ended lower by 2.45 points at 5921.40. As we mentioned in our last write up, we are anticipating a bounce back in the Nifty. The much-awaited bounce did come from our mentioned support level of 5870.

On daily charts, if we analyse the daily candlestick it’s a long range candlestick suggesting that there is tough fight between bulls and bears. This combined with a flat close suggests that there is lack of conviction on either side. We expect today’s session to be highly volatile. So support for the Nifty will come in at 5900-5870. At the same time, the Nifty will face major hurdle in the zone of 5940-5980. If the Nifty sustains above this level, we expect a fresh breakout.

Yesterday, RIL unveiled its gigantic plans of Rs 1.5 crore of capex for the next three years. It also has said that it will hire 7000 employees this year itself to enter in the telecom segment. The stock however reacted negatively with a small spurt in the price towards the end of the day. The question is whether it will increase its free cash flows in these years. The market is expected to take some time to digest this news and come up with projections. The moot question is whether the all the plans will lead to an increase in the earnings. The stock should remain volatile today.

Natco Pharma reported its Q4 earnings after market hours yesterday. The company reported a 14% rise in its gross sales to Rs 161 crore. Its net profit however declined by 10% to Rs 11 crore. During the quarter, the company reported a 30% rise in its interest cost to Rs 8 crore. Depreciation costs also tripled to Rs 6 crore which impacted its operating profit. The stock should show some correction on the back of the decline in profitability.

Claris Lifesciences announced that it has received an Abbreviated New Drug Application (ANDA) approval for Levofloxacin injection in the US. Levofloxacin injection is an anti-infective drug administered on adults suffering from infections such as pneumonia, acute bacterial sinusitis or complicated urinary tract infections, etc. Stock prices of Claris Lifesciences are expected to see some upward movement today.

Godrej Properties launched the fifth phase of its residential project in Kolkata – Godrej Prakriti. In addition to this, it is also developing two commercial projects in Kolkata and a super luxury residential project. Stock prices of Godrej Properties are expected to see some upside today.