Index Trends And Stocks In Action For February 26, 2014

Indian Equity market after a firm start and witnessed a setback around noon session however it managed to recover and ended with gains for the third day in a row. Movements were quite choppy almost right through the session. Capital Goods, Consumer durables and IT stocks edge higher. Nifty ended with modest gains of 14 points at 6200. In our last write up we mentioned that bullish momentum is likely to continue but 6220 will act as stiff resistance, so this was in line with our expectation.

One day prior to the February derivative settlement, the nifty closed in green but a tad lower than the resistance zone of 6220-6245. This zone will be the most critical levels for the bulls to take out, if bulls manage to sustain above this level a fresh wave of up-move might be witness in coming trading session. On downside 6160-6175 will act as a strong support zone in case on any sell-off or profit booking. So expect some volatile moves due to end of the expiry crucial range would be 6160-6240.

JSW Steel (BSE Code: 500228) is going to hike steel prices between Rs 500 and 750 per tonne on long and flat products from March 1, 2014. This would be third consecutive price hike by the Sajjan Jindal-controlled company this year. It has been raising prices in the last six months to protect margins from higher iron-ore costs despite slow domestic demand. The stock may remain in focus in today's trade.

Tata Power's (BSE Code: 500400) Mundra UMPP will get about 47 paise per unit more following electricity regulator CERC allowing higher tariffs to mitigate the company's higher cost of imported fuel. Central Electricity Regulatory Commission has allowed higher tariff of 52 paise and a compensation of Rs 329.45 crore to the company, effective April 1, 2013. However, as per the CERC ruling, Tata Power will have to forgo 1 per cent of its return on equity which amounts to Rs 50 crore per annum. The stock may remain in limelight in today's trade.

The board of state-owned Oil India (BSE Code: 533106) has approved the acquisition of a 5% stake in Indian Oil Corporation (BSE Code: 530965) from the government at a discount to the market price. The OIL board, at its meeting, approved the proposal to buy IOC shares in an off-market trade. Both the stocks may remain in the limelight in today's trade.

NMDC (BSE Code: 526371) is likely to clock its lowest average realisation this fiscal, in four years, due to subdued price of the key steel-making input. NMDC's average realisation in the first three quarters of the current fiscal stood at Rs 3823 per tonne against Rs 4019 per tonne in the entire last fiscal. In the previous two fiscals, the average realization was even better. It was Rs 4,091 per tonne in 2011-12 and Rs 4,289 a tonne in 2010-11. The stock may remain volatile in today's trade.