Index Trends And Stocks In Action For 22nd July 2013

The Indian equity markets moved in a fairly narrow band of 30-40 points amid some choppiness on Friday. However, buying was seen in IT and Auto stocks. The IT sector outperformed the benchmark index after TCS posted stellar numbers. The Nifty 50 index witnessed marginal drop of 8 points to close at 6029. In our last write-up we mentioned that we may see consolidation or minor correction in a couple of days. What happened on Friday was in line with our expectations as the Nifty corrected some 30 points from the level it opened at.

Going ahead, we may see this consolidation and correction phase to continue and the Nifty will find support in the zone of 5970-5990. On the upside, the Nifty has major a hurdle at around 6072. If we cross this level we may see a rally up to levels of 6150. For intraday, 6039 will be a stiff resistance and support for the nifty will be at around 6010-5990.

Texmaco Rail & Engineering has disappointed the markets by giving an open offer to the shareholders of Kalindee Rail Nirman to buy the shares at the price of Rs 68 per share against the current market price of Rs 70 per share. The shares of Kalindee Rail Nirman have seen over 20% gains over the last two weeks but Texmaco’s offer price is a disappointment. Following this as a general trend, the shares should surge indicating that investors are not happy with the price.

Zuari Industries has scrapped a Rs 5000 crore urea manufacturing project in Karnataka. The company has been in talks to buy Mangalore Chemicals and Fertilisers since the last few days but the deal is yet to be finalised. The Karnataka-based urea project was a 1.3 million tonne per annum (mtpa) gas-based project and has been cancelled by the company due to land acquisition issues in the state. Following this the shares of Zuari Agro Chemicals should trade lower today.

Venus Remedies said it is expecting Rs 1000 crore revenues by FY17 on the back of higher exports. Its current revenues stand at Rs 460 crore. The company currently has 25 products under its R&D segment and it forecasts this segment to capture 50% of its total revenues by FY17 from the current 33%. Share prices of Venus Remedies are expected to see some upward movement today.

Pradeep Phosphates announced its results wherein profit before tax fell by 49.2% to Rs 131.74 crore in 2012-13. This was mainly on the back of higher interest costs, delays in subsidy payment, decreased realization, a deficient and delayed monsoon and price differentials. Stock prices of Pradeep Phosphates are expected to see some downward movement today.