Index Trends & Stocks In Action For 18th September 2013

Indian Equity market ended flat on Tuesday amid a volatile trading session as trader remained caution ahead of two day FOMC meet starting today. The 50-share nifty gained 10 points to close at 5850. In our last write up we mentioned that we see a range bound trading session and what we witness was in line with our expectation. Going ahead we feel market will see another day of consolidation. For intraday important level for nifty on downside is 5800 and if we break this level we may find support around 5770-5750. On upside nifty will face resistance around 5890-5940.

Countries major hospital chain, Apollo Hospitals has said that it is in talks with private equity player KKR to sell 7% stake in PCR Investment, the holding company of Apollo Hospitals. This will be equivalent to 3-4% stake in Apollo Hospitals. The company has also said that out of lined up capex plan of RS 2500 crore, Rs 600 crore has been spent so far while rest is yet to be spent. Also it is confident to add total 900 beds in the next few months to take total bed strength to 3500 by 2015. The hospital is also on track to touch 2,000 pharmacies over the next few months. The company has said that it may divest the stake in the pharmacy business or bring a strategic parner. With so many developments, the stock could show some action today.

Ranbaxy’s woes seem to be never ending as US FDA has now extended its consent decree on its very new facility i.e. Mohali. Already it has two manufacturing facilities under the decree. The Mohali blow would seriously affect Ranbaxy’s business as it is only the second manufacturing facility that is catering the US generic market. The stock is expected to show volatility today.

Tata Motors could show some positive trading today on the back of upgradation of Jaguar Land Rover Automotive by Rating agency Moody’s on the back of strong and fairly stable credit profile. JLR has shown improvement in its performance due to competitive model line-up and improved geographic presence in emerging markets, especially in China.

YES Bank has raised USD 255 million loans from overseas and will swap it with Reserve Bank of India to take the advantage of the subsidised rate offered by new governor Raghuram Rajan as part of moves to attract dollar. The bank said the landed rupee cost of borrowing after swap will be between 8.50-8.75% giving the bank a clear 150-175 basis point cost benefit. YES Bank raised the money for one and two years while raising one year corporate deposit costs a bank around 10.25% at present.

India pushed import duty on gold jewellery up by half to 15%, the finance ministry said; setting it higher than raw gold duty in a move aimed more at protecting the domestic jewellery industry than stemming bullion imports. India imported gold jewellery worth USD 137.57 million in the four months from April to July this year,  a fraction of overall bullion imports, which were USD 2.9 billion in July alone.