Index Trends & Stocks In Action For 31 October 2013

The market started on a rather muted note and traded in narrow range in the morning session yesterday. However in the afternoon session, the market shifted gears and surged to fresh highs. The Sensex closed at its all-time high closing. The Banking index after giving a strong breakout saw some consolidation today. Consolidation of the index for two to three trading sessions after a strong breakout is a sign of further upside. Today’s trading session is likely to be volatile. The Nifty will face resistance around levels of 6275-6310. On the downside the Nifty has a strong support around levels of 6218-6175.

Reliance Broadcast Network has informed the exchanges that the voluntary delisting proposal of its equity shares from the bourses has been approved by 99.3 per cent of the non-promoter group shareholders who indicated their choice through a postal ballot. On September 16, the company had said that its Board of Directors will consider delisting of equity shares of the company from the stock exchanges. The stock will react to this development and may go up a bit on hopes of better price in the delisting.

JSW Steel expects the iron ore supply situation at its Vijayanagar unit to improve in the near future, which would enable it to run the unit at its full capacity. With the opening of more iron ore mines in Karnataka, around 7 million tonnes of iron ore is likely to be added to the supply in the next six months. This spells good for the company and the stock will see a positive trade today and for some more days to come.

Maruti Suzuki India is looking at cutting import content by a fifth by the end of this financial year to enhance profitability and boost margins. The company is working at reducing import content to 16% by March 2014, from around 20% registered at the end of the last financial year. Maruti Suzuki, which reported a three-fold increase in post-tax profits for the second quarter ended September 30, 2013 at Rs 670.23 crore, has additionally initiated focused cost reduction measures to reduce material expenses to sustain robust margins despite slowing sales in the domestic market. The market is likely to take cognizance of these initiatives and the pent up demand will lead to some upside in the stock.

Partnering with the Gujarat government, Siemens has signed a memorandum of understanding for establishing five Centers of Excellence to improve skill development in the state. These Centers would be first of their kind, which would focus on Automotive, Industrial Machinery, Industrial Automation, Aerospace & Defence and Shipbuilding. The centers would require an investment of Rs 489 crore, which would be met through a public private partnership. The stock of the company is expected to move up based on these developments as they happen to be in a strategically important state.

Ramco Systems, an aviation software provider through cloud, mobile and tablets has announced that it will be going live in next eight weeks at Astra Airlines, an airline operating from Greece. The implementation was done remotely using cloud technology with Lean model which ensured on time with the budget delivery. The Ramco stock is expected to ride on this announcement today.

Policy Related

The Cabinet approved the Pharmaceuticals Purchase Policy (PPP), for a period of five years aiming at ensuring optimum utilization of the installed capacity of the pharma Central Public Sector Entreprises. The policy is made in respect of 103 medicines would be valid for a period of five years from the date of issue of orders by Department of Pharmaceuticals. It said the pricing of the products would be done by National Pharmaceutical Pricing Authority (NPPA) using the cost-based formula, as mentioned in the Drugs Price Control Order, 95. A uniform discount of 16% would be extended to all products. All the taxes would have to be passed on to buyers. Smaller pharma companies like Elder and Unichem will benefit out of this.