Index Trends And Stocks In Action For 17th June 2013

The Indian markets snapped the three-day losing streak to end about 2% higher on Friday, amid strong global cues. Lower-than-expected WPI in May 2013 ignited hopes of a policy rate cut by the central bank at its policy meet scheduled to be held later today. The 50-sahre Nifty ended up by 106 points at 5805.

In our last write-up, we mentioned that the Nifty is trading near important support levels and a bounce-back is round the corner. If we analyse daily charts, the Nifty has closed above the 200-day EMA which is a positive signal. However, volumes were below average and the RSI is still in oversold zone. We expect a pull-back if the Nifty to levels of 5890-5920 if it sustains above the level of 5820-5830. On the down-side, support will come in at levels of around 5765- 5735.

Shares of Jet Airways rose sharply in the last week ahead of the FIPB's decision on the 24% stake sale to Etihad. The stock rose by 8.5% to close on Rs 469 on Friday. The FIPB however has deferred its decision seeking clarification on control and ownership of the airlines after this deal. The information came late in the market on Friday. The stock may show some negative action on the back of this.

The Mahindra Group and Spain based CIE Automotive S. A. have signed a global alliance agreement between them to form a global automotive component supply network with combined annual sales of about Rs 15000 Crore. Accordingly CIE Automotive will buy stake in the three listed subsidiaries of Mahindra namely Mahindra Composites, Mahindra Ugine Steel Company and Mahindra Forgings.  A spurt in the share price of these three listed companies is expected as an open offer is already been announced by CIE Automotive at a significant premium to the market prices for all these three companies. Following this a surge in the share prices of these companies is expected today.

Tata Motors said its global sales, including those for Jaguar Land Rover (JLR) stood at 81783 for May 2013. Of these, sales of JLR were at 31210. Total passenger vehicle sales stood at 43142 while commercial vehicle sales stood at 38641. Stock prices of Tata Motors are expected to show some volatility today.

The Super Thermal Power Station (STPS) of NTPC at Kaniha has 279600 tonne coal stock and is battling critical stock levels. This level implies that stocks will last only five days. Stock prices are expected to see some downward movement today.