Index Trends & Stocks In Action For 12th September 2013

Yesterday the Indian equity indices remained volatile but ended the session on a flat note. However select stocks from metal, realty and banking space witness sharp run up in last hour of trading. The 50-share nifty added 16 points to end at 5913. In our last write up we mentioned nifty has strong resistance around 5925 and nifty made high of 5924. Going ahead 5925 will act as resistance a fresh breakout will be witness only if nifty trades above 5725. The next level which is likely to act as resistance would be around 5980.  On down side 5850 and 5810 will act as support.

Tata Motors said its global sales, including Jaguar Land Rover, declined by 16.21% to 81,457 units in August, 2013. The company had sold 97,225 units in the corresponding period of 2012. Global sales of all passenger vehicles in August 2013 stood at 43,474 units, down 7.77% from 47,141 units sold in August 2012. Sales of the company’s luxury brand Jaguar Land Rover, however, rose by 28.40% to 30,895 units during August 2013, as compared to 24,060 units in August 2012.

The proposals of Axis Bank and HCL Technologies to raise foreign shareholding limit will be taken up for consideration by the Foreign Investment Promotion Board (FIPB) next week. The FIPB, headed by Department of Economic Affairs Secretary Arvind Mayaram, in its September 19 meeting would also consider 30 other proposals, including six from the pharmaceutical sector. Expect positive movement for the stocks today.

India’s largest explosive consumer Coal India has lined up a dual strategy to meet its demand for explosives. The company is set to acquire Indian Oil Corporation's (IOC) explosives division and would also become a supplier of ammonium nitrate, so that manufacturers can produce it for them on a contractual basis. The state-run coal producer buys about Rs 1,500 crore worth explosives per annum. The effort is seen as an effort by CIL to burst the cartelization by explosive manufacturers for procuring tender from the coal major. We feel Premier Explosives may remain in a positive zone today. 

Sadbhav Engineering has been declared as the successful bidder for two water projects, cumulatively worth Rs 457 crore. The biggest of the two, worth Rs 428 crore, is from water resources department of Madhya Pradesh for executing the full canal network of Bahuti High Level Canal from KM 18-KM 74. Expect the scrip to trade with some gains on the bourses.

Post the good set of JLR numbers, analysts on the street have become optimistic on Tata Motors. They are expecting a further upside in the stock and hence advising to accumulate the stock on dips. JLR’s total unit sales were up 28% on YoY basis. Sales in China grew by 43% while that in North America grew by 40% which has caused a major cause of up gradation. The target prices set by analysts are in the range of Rs 366 – 400. There could be further gains seen in the stock on the news of the upgrade.

The Telecom Regulatory Authority of India has asked the TV channels to cap their advertising to 20 minutes per hour. A few channels have been practicing about 30-35 minutes of ads per hour but with the new regulation, the TV channels are set to lose a huge chunk of revenues. As per a study by KPMG, the television industry was expecting to generate Rs 14000 crore in ad revenues this year which now looks like a difficult task. There could be some negative pressure on stocks like Zee Entertainment and TV Today etc.