Index Trends And Stocks In Action For 9th October 2013

Indian Equity market opened gap up as RBI reduced the MSF rate to 9% from 9.5%. However, as the day progressed, gains were trimmed in Nifty and also in Bank Nifty. Nifty closed with marginal gains of 0.38% at 5928. In our last write up we had mentioned that Nifty will face resistance around level of 5990 and post gap up nifty managed to touch mark of 5982 and trimmed its gains as expected. Now going forward we expect market to trade in range of 5800-5990, ahead of earning season which is about to kick start from Friday. IT major Infosys result will guide the market ahead and if we break the range on higher side that is 5990 we may expect market to touch 6150 in short term or else if market breaks lower range i.e 5800 that we expect market to touch 5550 in short term.  For intraday- Nifty will face resistance around levels of 5950-5990 and support for nifty on downside is around 5880-5840.

The Reserve Bank has restricted foreign institutional investors (FIIs) to purchase shares in Great Eastern Shipping Company and Kajaria Ceramics as the foreign equity shareholding have reached the trigger limit of 24 per cent. There has been consistent increase in FII holdings of these companies. We are of the opinion that the stocks are likely to remain in upward momentum in near term.

Tata Steel is talking to banks about raising $1 billion from an overseas bond sale to refinance a part of its existing debt. We had yesterday informed our readers about the possible sale of cross holding in other Tata Group companies. We expect the scrip to move upwards in near term.

The reports suggested that the balance sheet of Unitech could see some improvement as it is likely to sell its Gurgaon IT- SEZ for Rs 2,600-2,700 crore. The SEZ is owned by Unitech Corporate Park (UCP), an entity listed on London’s stock exchange. Unitech owns 14 percent in the company. Meanwhile, it also holds a 40 percent stake in the zone. If the deal goes through, it will be the largest in calendar year. We expect the shares of Unitech to Witness an up-move.

Videocon Industries has clarified its stance in reference to the news item appearing in the media regarding the Company is in process to divest up to 26% stake in telecom arm. The management has given a general expression in the past about possibility of equity dilution at an appropriate time and the process is still continuing. But there has not been any material event of any kind in this regard which needs to be informed to the Stock Exchanges. The management clarified that, the Company does not comment on the rumors and speculative market reports.  We expect a negative impact on Videocon Industries.