Index Trend And Stock In Action For 20th June 2013

Indian markets closed marginally higher after a volatile trading session this Wednesday as anxious traders and investors awaited the outcome of the US Federal open Market Committee meeting. The 50-share Nifty gained 8 points at 5822. Nifty has formed kind of bullish piercing line candlestick pattern which is a trend reversal pattern. After strong consolidation of 3-4 trading sessions, we expect market to be volatile on Thursday. Nifty will face hurdle around levels of 5855-5870, once we clear this resistance level we may head to 6000 odd levels in short term. On other hand 5760 is important support for nifty as its 200-day EMA for nifty and 61.8% retracement level. If we break this level markets may decline severely.

The European Commission imposed a fine of €146 million on nine pharma companies, including Ranbaxy Laboratories, for delaying market entry of cheaper generic versions of Danish company Lundbeck’s branded citalopram, a blockbuster antidepressant. Ranbaxy Laboratories has been fined €10.32 million (over Rs 80 crore). We expect the companies to witness a decline on bourses.  The Finance Ministry has turned down Agriculture Minister Sharad Pawar’s proposal to hike sugar import duty immediately so as to address mounting cane arrears, saying such a move would lead to inflation. In a letter written recently to the Finance Minister, Pawar had said that arrears of sugar mills have risen to over Rs 10,000 crore and there was a need to hike import duty to curb shipments, which is putting downward pressure on local prices. Expect sugar stocks to remain under pressure.

Reports suggested that Wipro has won a large technology outsourcing contract, potentially valued at close to $ 500 million (Rs 2,900 crore) from Citigroup. Wipro has managed to bag a large order when most of the other companies have been witnessing pressure to secure large orders. We expect the scrip to witness a positive movement on the bourses today.

Urban infrastructure developer Pratibha Industries has won contracts worth Rs 526 crore, including order for construction of a water treatment plant in Nepal. Expect the counter to witness a good up-move on the bourses today.

IT is reported that, US Food and Drug Administration (USFDA) has issued a warning letter to RPG Life Sciences for violation of current good manufacturing practice (CGMP) norms at its two plants at Ankleshwar and Mumbai. The USFDFA has stated that until all corrections have been completed and FDA has confirmed corrections of the violations and your firm's compliance with CGMP, FDA may withhold approval of any new applications or supplements listing RPG Life Sciences as a drug product manufacturer. One can expect a decline in stock price today.