Index Trends & Stocks In Action For 1st July 2013

The Indian equity markets were in the grasp of the bulls for the second day in a row, supported by both global and domestic cues, helping the Nifty surge by 159 points to close at 5842. Going ahead, the Nifty has a cluster of resistance levels in the zone of 5830-5880.

Here are some reasons why this range will be a stumbling block for the bulls to cross

1. Resistance of the declining trend line is placed at around 5880
2. 5820-5830 is the 38.2% retracement level for the Nifty
3. The 200 DMA is in place at 5821
4. The Nifty has formed multiple tops in the range of 5855-5870

If the bulls manage to cross this level, then the immediate target for the Nifty would be 5950-5970. On the downside, it has support at levels of 5770-5750.

Shares of Crompton Greaves should see an upside following a news of buyback of its shares by the promoters of the company at the price of Rs 125 per share amounting to a total buyback of Rs 265 crore. The scrip, on this news, rose by 8% to Rs 87 a piece on Friday but considering the premium on the buyback prices, the shares definitely have more upside.

Hindustan Motors has reported that it has signed an agreement with Japan based motor company Isuzu Motors for contract manufacturing of Isuzu's pickup trucks in India. The components for producing these trucks would be imported by Isuzu Motors from Thailand and would be assembled in Hindustan Motor's factory in India. According to industry sources, the contract is for four years and is a definitive revenue stream for the company. Share prices of Hindustan Motors are expected to see some upward movement today.

Automobile companies will be announcing their monthly sales figures for June 2013 today. Stock prices of Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hero MotoCorp, Bajaj Auto and TVS Motor are likely to remain volatile through the day. The directional movement in these stocks will be dependent on the numbers they announce.

Lupin said it is looking for acquisitions in Latin America for its expansion. The target markets for this move would include Brazil, Mexico, Argentina and Chile. While the acquisition will be funded through internal accruals, the company might also look at raising debt. Apart from acquiring companies, it is also looking at acquiring brands in key therapeutic areas. Stock prices of Lupin are likely to see some upward movement today.

Jet fuel (ATF) prices were hiked by a steep 5.8%, the second consecutive increase since June 2013, as rupee depreciation made imports costlier. Airlines stock like Jet Airways (India) and Spicejet may trade with a negative bias.