Index Trends And Stocks In Action For August 22, 2014
Indian Equity market ended the day with modest gains amid volatile trading session. Blue-chips stock led the gains. Stocks like State Bank of India, Bajaj Auto and Sun Pharmaceuticals. State-run oil marketing companies witness buying on the back of weak crude prices. In our last write up we mentioned Nifty will move in nagging range and this was in line with our expectation. Index made yet another attempt to cross its supply zone of 7930-7940, but it failed.
After a strong rally from levels of 7540 to 7920, market has entered into consolidation phase. In this consolidation the index should not breach its support of level of 7800-7820.If any case index breaks this support level then expect further selling pressure coming in up to levels of 7735. The most critical level on the upside is around 7930-7940, if this is taken out expect quick move up to levels of 8000.
Cairn India (BSE Code: 532792) has received approval from the environment ministry to raise crude oil output of its fields in Barmer in Rajasthan to 300,000 barrels per day (bpd). So far, the company was producing just above 200,000 bpd and had been seeking the government’s nod to increase the output further. The environment ministry’s nod comes at a time when the company is spending $3 billion to develop new resources in the Barmer field and implement one of the world’s biggest oil-recovery programmes from its ageing Mangala field in the area and double its natural gas output from Rajasthan. Cairn India will also open up the sea route to transport its crude oil to firms such as the Kochi refinery of Bharat Petroleum Corp. and the Visakhapatnam refinery of Hindustan Petroleum Corp. , Mint reported in June. The company has started discussions with these companies. The stock may trade with a positive bias in today’s trade.
Canara Bank (BSE Code: 532483) is planning to sell Rs 900 crore of sticky loans to asset reconstruction companies this quarter in an effort to clean balance sheet. This would be the third asset sale by the lender in as many quarters as it aims to bring down non-performing assets ratio to 2% by FY15. Also ready with the QIP plan. If the government gives the nod now, it will raise the fund by September. The bank may raise equity next fiscal through follow on public offer. The stock may trade with a positive bias in today’s trade.
Ranbaxy Laboratories (BSE Code: 629.55) may have to pay a hefty fine of around Rs 242 crore to the US authorities on account of violations found at its active pharmaceutical ingredient (API) manufacturing factory in Toansa (Punjab). The facility is currently banned from supplying products to the American market. This will be the second such hefty penalty for the company, which paid $500 million to the US Department of Justice (DoJ) in May 2013 after it pleaded guilty to felony charges related to drug safety and misrepresenting data to gain faster approvals. It included $150 million in payments for a criminal fine and forfeiture and $350 million in payments for civil claims. The stock may trade with a negative bias in today’s trade.