Index Trends and Stocks In Action 02 December 2013

Indian Equity market opened on positive note and build on the morning gains to end near day’s high. Breadth of the market was on positive side and was in favour of buyers. In our last write up we mentioned 6125 is stiff resistance for Nifty and if we sustain above this level than Nifty will set up for up move till 6220-6220, this was exactly what we predicted as soon as Nifty crossed 6125 we saw a rally of 50-60 points. Nifty on daily and weekly charts has formed a bullish candlestick and closed on upper end of the candlestick. This hints that momentum is in favour of bulls. Going ahead Nifty has first hurdle around levels of 6200-6225 and if Nifty sustains above this level than gates for 6300-6350 will be opened. On downside 6130 and 6100 will act as strong support.

The follow-on-public offer (FPO) for 17% stake sale in Power Grid Corporation of India (PGCIL) will hit markets on December 3 which is expected to garner up to Rs 7083 crore. The issue opens on December 3 and closes on December 5 for institutional investors and December 6 for retail category of investors and employees. The price band for the issue has been fixed at Rs 85-90 a share. The company may garner close to Rs 5,717 crore, while the government will get around Rs 1,758 crore. The stock may remain in focus in today’s trade owing to this development.

Videocon Industries proposes to seek shareholder approval to raise up to Rs 5000 crore. The funds could be raised through various means, such as the issue of shares or foreign currency convertible bonds. The stock is likely to witness some kind of attention from traders in today’s trade and may trade with a positive bias.

Shree Renuka Sugars has said if forced to increase the payout to the sugarcane farmers, it will shut factories in Karnataka. Renuka, one of the largest sugar producers in the country, is in high debt. If it toes the line of the state and pays Rs 2,650 a tonne, its debt will increase. The stock may trade with a negative bias in today’s trade.

Financial Technologies India, which last week sold its Singapore Mercantile Exchange (SMX) for USD 150 million, is understood to be looking for buyers for more of its ventures global exchanges, as well as domestic subsidiaries. It is believed that some of these deals could be sealed in the current financial year itself. The stock may continue to witness selling pressure for today’s session.