Index Trends & Stocks In Action For 11th September 2013

The equity market ended yesterday’s trading session on a strong note with both the benchmark indices registering gains of nearly 4% each led by positive foreign flows. The Nifty surged more than 200 points to end at 5897. In our last write up we had mentioned that if the bulls manage to pull the Nifty above 5755 we may see levels of 6000 on the Index. What happened yesterday was something very similar. We are just 100 points shy from touching the crucial level of 6000 on the Nifty. Going ahead the Nifty will face resistance at around levels of 5925 and 5970. On the down side, support is placed around 5862 and 5820.

The Country's largest software services firm Tata Consultancy Services yesterday reported that it has bagged a 5 year multi-million Euro deal from SAS Scandinavian Airlines to help the airline transform and optimise its IT infrastructure. TCS will implement its cloud-based solutions to execute this contract. The company has recently been selected for several engagements like TDC in Denmark, Posten in Norway, Nokia in Finland, SAS in Sweden and the Nordic region. The news adds to the positive sentiment that the TCS stock has already been enjoying for quite some time now.

Jindal Steel & Power is planning to set up a coal fired power plant in the West African country of Liberia. The project will consist of two units of 175 MW each at an investment of USD 200 - 250 million. This investment by the Jindal group is likely to be routed through its arm, Jindal Africa. The Naveen Jindal group signed a term sheet agreement with the government of Liberia for the proposed power project during the ongoing state visit of the Liberian president Ms Ellen Johnson Sirleaf to India. Watch out for the JSPL stock in today’s trades.

ONGC Videsh, the overseas arm of state-owned Oil & Natural Gas Corp (ONGC), and its partners OIL and IOC are mulling the buying of an 11 per cent stake that Malaysia's Petronas has decided to give up in a USD 20 billion oil project in Venezuela. Petroliam Nasional Bhd, Malaysia's state-run oil company, has decided to withdraw from the Carabobo-I project following a dispute over terms with Venezuela's state explorer Petroleos de Venezuela SA (PdVSA). Stocks of ONGC, OIL and IOC are likely to see some action following this development.

Cummins, inaugurated its seventh plant in the country which will boost the company's exports. According to the company management, the plant located in a Special Economic Zone at Phaltan near Pune will roll out high horsepower engines. The facility is the largest high horsepower manufacturing site in the world and will build QSK 23 tier I and II engines, which can produce 3000 units per year initially. One could look at the Cummins stock as developments like these are sure to prop up the overall fundamentals of the company.

Piramal Healthcare will invest USD11 million (over Rs 70 crore) at its Morpeth facility in UK to triple the production capacity for hormonal products including contraceptive pills and hormone replacement therapies. Watch this stock which will react to this development in today’s trades.

Seeking to increase the inflow of foreign capital, the Reserve Bank of India (RBI) today further relaxed norms that would encourage banks to raise funds in overseas market. Under the new norms, RBI has allowed a swap facility for term deposits in dollar denomination ranging from 1—3 years at a concessional rate of 1 per cent below the market rate, RBI said in a notification. Besides, it has relaxed norms for banks to borrow funds from overseas markets, up to 100 per cent of equity capital, with upper limit of $10 million. Look at the banking pack carefully. Take some good but measured exposure to them.

India Cements Chairman, N Srinivasan was charged as one of the accused in the three charge sheets filed by CBI in connection with a case of disproportionate assets. CBI has said that India Cements got undue favors for water allotted to its factories. The CBI has also said that the company got a number of other concessions such as limestone mine allocation and tax benefits. The stock is likely to tumble on this news.