Index Trends & Stocks In Action For 19th August 2013

The markets witnessed their highest single day drop since July 2009 in absolute terms amid heavy selling by foreign institutional investors. The selloff was triggered after the RBI imposed fresh restrictions coupled with the weakening rupee which plunged to a new all time low of 62 to a dollar. The road ahead is difficult for the bulls. The next significant support for the Nifty comes around 5470 and if we break this level we may see the index touching levels of 5440 which is an important support for the Nifty. On upside 5550 will remain a major level to break.

ADAG group company, Reliance Power is seeking a tariff hike for its ambitious 4000 MW Tilaiya Ultra Mega Power Project. The company will file a petition for the same this week with the Central Electricity Regulatory Authority. Tilayia is a coal fired power generation plant and currently has a tariff of Rs 1.77 per unit. Earlier Adani Power and Tata Power saw the CERC ruling in their favour and the same may be seen in the case of the Tilaya project. Reliance Power could witness some market interest following this development.

The much awaited merger of Sesa Goa and Sterlite Industries has finally gone through. As per this deal, Sesa Sterlite will be the holding company of all group firms of Vedanta. Shareholders of Sterlite will get three shares of Sesa Goa for every five shares held, as per the swap ratio. The new company will have assets worth Rs 1.95 lakh crore and and will also carry a total debt of around Rs 1 lakh crore. The merger will save Rs 1000 crore annually for Vedanta. Stocks of both these companies may remain volatile today.

According to reports Swiss pharma major Roche will not be pursuing an Indian patent for its anti-breast-cancer drug, Herceptin. This according to analysts means a loss of millions of dollars to the company. However, the loss of one is always the gain of someone else and that is exactly what this case means for Biocon. Reports suggest that this may bring in a windfall for Bangalore-based Biocon. The Biocon stock surely will see some good action following these news reports.

According to reports, Barings Private Equity is set to buy the entire promoter stake in Hexaware Technologies. Promoters are reportedly holding around 27.92% in the company. It is not just the promoters but also PE firm General Atalantic which will be selling its stake held in the company to Barings PE. These developments are likely to help the stock remain in action for today.