Index Trends & Stocks In Action For 27th August 2013

The market closed with marginal gains amid volatile trading on Monday. The Nifty rose 4 points to close at 5476. In our last write we had mentioned that 5520-5530 will act as a stiff resistance on the Nifty. After touching a level of 5530 the Nifty corrected in a big way and took support at around 5450. On the daily charts the Nifty has formed a bearish candlestick and it didn’t manage to close above levels of 5510-5520. This clearly hints that it’s time to say good bye to the bulls and the Nifty can see some correction in the coming session. Confirmation will come if we close below 5440-5450. On an intraday basis the level of 5530 will act as a stiff resistance and on the downside the support for the Nifty comes in at 5440 and 5400.

Federal Bank has applied to the Foreign Investment Promotion Board for hiking the foreign holding limit in the bank to 65 percent. This development could keep the stock well in action for the day.

Jubilant FoodWorks will open up to 100 of its Dunkin' Donut outlets in the next four years to enhance the brand visibility and in turn revenues in India. The announcement certainly bodes well for the stock for the day.

With depreciating INR against the US dollar making imports costlier, state- owned oil firms like IOC, HPCL and BPCL have demanded a one-time steep increase in diesel rates to make up for the widening losses. Losses on sale of diesel at government controlled rates had dropped to under Rs 3 per litre in May following monthly increases of up to 50 paise a litre. But with the rupee depreciating against the US dollar, the losses have widened to Rs 10.22 per litre. OMC stocks are likely to watched keenly by the markets following this development.

With the government fast tracking the clearance of infrastructure projects worth more than Rs 1.50 lakh crore and with a lot of stress on the power sector in this, power company stocks are likely to remain well in action today.