Index Trends And Stocks In Action For 12th June 2013

The Indian markets witnessed bloodbath to end down by 1.5% on Tuesday amid weak global cues. Traders and investors turned cautious ahead of key economic data and booked profit in rate sensitive stocks while the further fall in the rupee continued to weigh on investor sentiment. The 50-share nifty ended down 89 points at 5789.

In our last write up, we mentioned if the markets sustain below the level of 5850, we can may see levels of 5790.What happened yesterday was that as soon as the Nifty plunged below 5850, it went on to touch 5790 in no time. The Nifty, for the first time in the last one month, closed below 5800 along with high volumes. This indicates the market is in the grip of the bears.

Going ahead, the key level to watch out for is 5765 which is important because it’s the 200 day EMA for the Nifty. If we breach this level we may see 3-5% correction in the short-term. The Nifty will face resistance at levels of around 5820-5845.

With the dollar at the highest level against the rupee, MNC's are advised by investment bankers to increase their stake in Indian companies. Recently Crisil, HUL and GSK Consumer have see promoters increasing stake in companies. Diageo also acquired majority stake in United Spirits while Etihad bought 24% stake in Jet Airways. According to investment bankers, companies like Maruti Suzuki, ACC, Ambuja Cements, GSK Pharma, Nestle and Bosch may see promoters increasing the stake. These shares may also see some fresh buying in the market.

The rupee depreciation on the other had would be marring for the companies who have very high proportion of foreign currency denominated debt. Companies like Tata Power, Suzlon Energy, Sterlite Industries, Tata Steel, etc. have huge amount of debt in the form of FCCBs. The rupee depreciation would be negative for these companies and hence these stocks may show negative trades today.

The Competition Commission of India (CCI) has approved pharma firm Mylan Laboratories’ acquiring a manufacturing facility owned by Unichem Laboratories, saying the deal would not have an adverse impact on competition. The proposed deal includes Mylan acquiring the newly established manufacturing facility located in a Special Economic Zone in Dhar district of Madhya Pradesh, from pharma company, Unichem. It makes ‘Finished Dosage Forms (FDFs)’.

Fortis Healthcare has entered into a pact to sell its entire stake in Vietnam-based hospital chain Fortis Hoan My Medical Corporation to Viva Holdings Vietnam for USD 80 million (over Rs 465 crore). In 2011, Fortis Healthcare International had acquired 65 per cent stake in Hoan My Medical Corporation for USD 64 million.