Index Trends And Stocks In Action For 12th July 2013

Indian equity markets which have been range bound for some time got a boost from the comments of US Federal Reserve Chairman Ben Bernanke. Indian markets followed their Asian peers and comfortably crossed the psychological level of 5900. The Nifty 50 ended at 5930 up by 113 points. The month of July has been month of Gap up’s followed by gap down’s and volume have been relatively on lower side. Well today’s move is definitely very encouraging give the fact that we have broken past 5900-5910 odd levels where we were getting stuck for almost last two week or so. But the fact that this was a gap up again which has been trend for this month will not encourage the bulls. Going ahead market participant will eye result of IT major Infosys which will set the trend for the market. Currently Infosys hold 3.77% weight in Index. For intraday Nifty will face resistance around 5970 and 6020. On downside first support will come in around 5880-5820.

Shares of Wockhardt may show some volatility on the back of the news that MHRA has recalled 16 medicines of Wockhardt. These drugs are from the Waluj manufacturing facility, the same which is under the US FDA scanner. The stock has been under pressure for many sessions and the new development should lead to further correction in the stock.

IT Giant Infosys would be coming with the Q1 results. The rupee depreciation is expected to have a positive impact on the results however the market would be looking for a constant currency growth. There would further be update on the new strategy of the company after there is change in the leadership. The stock would be the main focus of the day and hence a gap up or gap down opening can be expected in the stock based on the result.

Maruti Suzuki, Tata Motors are to cut down the production due to the sluggish demand environment in the country. Earlier on Thursday Mahindra and Mahindra also reported about the block closure of production for almost a week to match the slower demand. Situation in the sector is very bad and the news of production cuts will keep the stocks down in today’s trading session.

Elder Pharma has received an aggressive bid for its manufacturing business which it is looking to hive off fully or partly. Global pharma giant Sanofi Aventis has shown a keen interest in Elder pharma and as per the market resources the Elder has been valued in the range of Rs 2,500-2,700 crore. Elder has a market cap of just over Rs 700 crore and hence Sanofi’s offer is very meaningful for Elder. The stock may show some gains.

The ministry of textiles announced on Thursday that the government would write-off the principal amount and is working on total interest waiver for handloom sector loans. The loan write-off for the sector could be about Rs 3,400 crore. This should lead to some gains in the textile sector stocks.