Index Trends And Stocks In Action For 26th July 2013

The Indian equity markets plunged for the second straight session on Thursday, weighed down by profit-booking in FMCG shares after recent gains. The NSE closed at 5908, down by 83 points. In our last write up we mentioned that Nifty has crucial support of 5950 and if we trade below this level we may see levels of 5900. What we witnessed was in line with our expectations. As soon as the Nifty broke its support of 5950, in no time it touched 5900.

The Nifty has almost lost 170-180 points in the last two trading sessions and the fall has come along with a rise in volumes. This indicates bears have got a grip on the markets and weak positions are knocked off. Going ahead, the Nifty has crucial support in the zone of 5880-5900. If we close below this it will be a worrying sign for the bulls. For intraday, first support stands at 5880 and second support at 5860. On the upside 5933 will act as a major hurdle for the Nifty.

Fund managers have raised concerns over the proposed amalgamation between Holcim India, Ambuja Cements and ACC. As per the plan, Ambuja cement would buy a stake in ACC and Holcim India will be paid Rs 3500 crore. The deal as per the press release issued by Ambuja Cements is EPS accretive and has a synergy of around Rs 900 crore. Fund managers have however called the deal as a daylight robbery and hence the stock is likely to show volatility today.

Jubilant Life Sciences should show volatility on the back of the news that it has attracted a Chinese Commerce Ministry (MOFCOM) Anti-dumping investigation against Pyridine originating from India and Japan. Jubilant exports less than a quarter of its production of Pyridine and Beta to China. The company has said that the MOFCOM has announced provisional duties of 24.6% against the company. The stock on Thursday surged by 4% but on the back of this news we may see some volatility in the counter today.

Despite facing continued pressure on sales, which have been declining for months, the country’s largest auto major Tata Motors said it is thinking of raising prices before the forthcoming festive season. It can be noted that car sales declined by 9% in June, recording the eighth consecutive fall in monthly sales to 139632 units as against 153450 units a year ago.

DLF has agreed to sell its 74% stake in a life insurance joint venture with US-based Prudential International Insurance Holdings Ltd to Dewan Housing Finance Corp. The company said the financial details of the deal will be disclosed after the transaction gets all approvals.