Index Trends & Stocks In Action for 22nd August 2013

The equity market seems to be in complete disarray. Yesterday the benchmark indices closed at their 11-month lows, falling for the fourth consecutive session primarily marred by the woes of a depreciating rupee. The Nifty ended down by 98 points closing at 5302 and the Sensex closed below the 18000 mark. In our last write up we had mentioned about some bullish signs being witnessed on the daily charts. We had also mentioned about a pullback possibility and we did see a good pullback rally. An analysis of the daily candle of the Nifty puts the range of the candle at about 200 points. In the process, the Nifty has formed an outside bar pattern. Going ahead, the Index may consolidate or take a breather with a minor pullback. However, the condition for this to happen is, the index should not break yesterday’s low until Friday. If we break that low anytime on an intraday basis, chances are, we may see a fall upto levels of 5200. For intraday levels, 5255 will be a strong support on the downside. On the upside there is cluster of resistance first at 5340 and next at the 5398 levels.

NMDC has signed an initial pact with IL&FS Energy Development Company (IEDCL) to set up a 500 MW coal-based thermal power plant at Gonda in Uttar Pradesh. The initial investment for this purpose is earmarked at Rs 3000 crore. NMDC Power, a subsidiary of iron ore miner NMDC, would initially have a 48% stake in the venture while IEDCL will hold the rest of it. The news is likely to keep the NMDC stock quite in the limelight for today and a couple of days more to come.

Indian Oil Corp (IOC) will invest about Rs 8000 crore to expand capacity at its Koyali oil refinery in Gujarat to 18 million tonnes per annum by 2016-17. The long term prospects of the company get bolstered following this announcement and hence investors with a longer term view of the market would certainly flock to the counter following it.

Uttam Galva Steel has approached the government to surrender its two special economic zones (SEZs) in Maharashtra. The stock is likely to remain in focus for today following this news.

Maharashtra Electricity Regulatory Commission has allowed a Rs 0.57 paise tariff hike for the power supplied from the Unit 2 & 3 of the 520 MW Tiroda power project of Adani Power. This is the levelised tariff hike on and above the PPA tariff of Rs 2.642 per unit. Coming out of an interim order, there will be a further hearing in this case. The order comes after the Parekh panel allowed Tata Power and Adani Power to hike tariffs in their power projects based in Mundra. The move looks to be positive for the stock of Adani Power which is expected to remain in the limelight for today.

RIL has said that it will raise USD 1.75 billion to finance its capex plans in refining and petrochemical businesses. It has also signed a agreement with 19 banks to raise the funds as a syndicated term loan. The company has said that the rates for this loan, and, the deal has been oversubscribed even before being launched into syndication. The stock may remain in focus today.