Index Trends And Stocks In Action For April 17, 2014

Indian Equity market continue to languish on Wednesday for third successive session as foreign institutional investor prefer to take money off the table on back of recent weak economic data. The Nifty index closed at 6675 recording a loss of 57 points. Realty stocks were in red due to surge in inflation denting hopes of reduction in lending rates. Automobile stocks too ended lower. Banking saw some buying interest but retreated as the session progressed and ended mixed. In our last write up we hinted below 6690 gates for 6655 will open and Nifty almost made low of our anticipated level.

Going forward the range of 6650-6655 is important support zone first because 6648 is its 21-day EMA and second because last time Nifty made a doji reversal candlestick around these levels and went on to register new high in couple of trading session.  RSI is also trading near its important support zone. Nifty should hold on to levels of 6650-6640 on closing basis in order to continue its upward march. In case it closes below 6640-6650 than another fall of 60-90 points could come in. On upside 6720-6730 will act as major resistance.

Two top private equity players, Kohlberg Kravis Roberts (KKR) and Blackstone have put in bids for a total 8% stake in Idea Cellular (BSE Code: 532822), India's third largest telecom player. Singapore's state-owned investment company Temasek, is also known to be looking to invest in a telecom company in India, though its involvement in the Idea deal could not be confirmed. Idea has also been in the process of raising funds through a qualified institutional placement (QIP). Last September, it had come very close to clinching a deal, however it could not go through. The stock may remain in action in today’s trade.

Vishwa Kalyan Kamgar Sanghatana (VKKS), the independent trade union of Bajaj Auto (BSE Code: 532977) has threatened to go on strike form April 28 as the management is not utilising its corporate social responsibility funds for the benefit of workers. The union issued a notice to Bajaj Auto management on April 14, saying that the workers will stop the production at Chakan plant from April 28. Over 2000 workers are engaged in this facility to manufacture 1.2 million units of motorcycles, which include the Pulsar, Avenger, Ninja and KTM brands. The stock may witness volatility in today’s trade.

Reliance Communications (RCom) (BSE Code: 532712) has increased tariffs by up to 20% for its pre-paid customers with effect from April 25. The company has also raised headline or base tariff rates by 7% to 1.6 paise per second from 1.5 paise. The company has reduced the total number of minutes for special tariff vouchers of Rs 43, Rs 148 and Rs 259. The company need not inform sectoral regulator Telecom Regulatory Authority of India about the increase as it is below the ceiling of 2 paise per second. The stock may remain in limelight in today’s trade.

Internet services company Tata Communications (BSE Code: 500483) has expanded its global data centre footprint by entering into partnerships with NEXTDC in Australia, Interxion in Germany and Austria and Pacific Link Telecom (PLT) in Malaysia. These partnerships will enable Tata Communications to extend its current data centre offerings in these regions and deliver a uniform customer experience across geographies. The stock may remain in focus in today’s trade.

Infrastructure major Hindustan Construction Company (BSE Code: 500185) has won a Rs 300 crore contract from Delhi Metro Rail Corporation Ltd (DMRC) for design and construction of twin tunnel on Dwarka corridor. This is the third contract for underground metro received by HCC since October 2012 under the phase III development of Delhi Metro aggregating to Rs 1,539 crore. The stock may witness buying in today’s trade.