Index Trends And Stocks In Action For 14th June 2013

The Indian markets extended losses for the sixth straight day and ended over 1% down on Thursday on the back of weak global cues and selling in heavyweights. The 50-share Nifty ended the day at 5699, down by 61 points.

Going ahead, the Nifty has multiple support levels in the zone of 5600-5640. Firstly, 5622 is an important support level as it is the 50% retracement level for the Nifty. Second comes the level of 5600 which is a strong support level indicated by the long-term trend line.We hence feel the markets will bounce back from these levels.  5720 will act as a stiff resistance for the Nifty.

After Infosys, WNS and iGate, Wipro has been hit by a tax issue. As per news reports, the tax department has slapped a tax demand of Rs 816 crore on the company. The company has said that it will place its objectives against the tax demand before the dispute resolution panel. Wipro is also facing various other tax demands totaling to Rs 3936 crore for the period March 31, 2001 to March 31, 2008. The news is likely to be seen negatively by the investors.

Shares of Cairn India may trade lower on the back of its holding company Twin Star Energy Holdings (TSEHL) pledging its entire stake in Twin Star Mauritius Holdings (TSMHL). This is a cross holding structure in which Twin Star Energy Holdings holds 100% stake in Twin Star Mauritius Holdings which in turn holds 38.68% stake in Cairn India. The move is likely to be seen negatively.

Fitch revised its outlook on Issuer Default Ratings of seven state owned firms from negative to stable. The companies that saw this upward revision were GAIL, IOC, BPCL, NTPC, NHPC and SAIL. Stock prices of these stocks are expected to see some upward movement.

Unilever said it would start increasing stake in Hindustan Unilever starting June 21, 2013. It would pay as much as USD 5.4 billion to increase its stake from the current 52% to 75%. Share prices are likely to move upwards.