Nifty - Selling Opportunity
** The Nifty gained 111 points over the day to close at 4917. After
the recent sell-off it was an understandable day of pullback at the
markets yesterday as the indices opened gap-up and traded in a
range in the first half only to rally aggressively in the second half
and close near the days highest point. Such moves will keep
taking place while the markets remain in a downtrend and hence
should be sold into. The hourly/daily indicators were deeply
oversold along with divergence and hence an impact of the same
had to be felt at some point of time. The level of 4800/16000 was
and remains a trading support for the market but is unlikely to
hold in the next phase of the downtrend. The 4930-4960 area is
the immediate resistance zone to monitor where the ongoing
pullback should end. The rally yesterday was on low volumes
while the fall in the recent past has been on large volumes. The
Banking and IT sectors would cap the upside for the indices in
the short-term. For the day, support seen at 4890. Overall, one
should use the upmove as a selling opportunity as the downtrend
is likely to resume from within the 4930-4960 zone.
Market News & Trends
Corporate News – Industry trends
– M&M has bought a 55.2% stake in Reva to power electric car business. (ET)
– RIL and RNRL will present a gas supply agreement to the government for its
final approval in the next two weeks, in what could be the first concrete step in a
rapprochement between estranged billionaire brothers Mukesh and Anil Ambani.
(ET)
– Ranbaxy has sought the US drug regulators approval to sell a new drug in the
world’s largest pharma market that has been manufactured in a unit of its Indian
factory which is under scrutiny of the US regulator. (ET)
– Hindustan Petroleum Corp plans to invest Rs300bn to set up a 15-16 mn
tonne-a-year refinery on the west coast. (ET)
– General Motors India may not continue its tie-up with Reva with M&M taking a
controlling stake in the latter company. The US-based automaker has, however,
said that it would not abandon its electric vehicle plans for India. (BL)
– The Cabinet Committee on Economic Affairs gave its nod for a vital change
in the process of share sale in state-run firms. Merchant banker appointments
for Government stake sale will now be advanced to an earlier stage in the
disinvestment process, thereby saving time, which could be optimally utilised
in preparing for the actual transaction. (BL)
– M&M has ramped up Maxximo capacity and is gearing to roll out the minitruck
in the southern states in one to two months. (BL)
– The government has freed the import of radial tyres in to the country by
removing it from the restricted list. (BL)
– Asset reconstruction companies have moved the government and the RBI to
up the FDI limit in their equity capital as also the foreign institutional
investment limit in each tranche of security receipts issued by the companies
from 49% to 74%. (BL)
– Idea Cellular has tied up funds to pay the government Rs57.7bn for the 3G
spectrum it had won in 11 circles. The company is also planning to raise
Rs25bn from overseas markets. (BS)
– IVRCL Infrastructures and Projects Ltd’s buildings, transportation and water
divisions have bagged orders aggregating Rs5,673mn. The orders include
extension of the Bihar Vidhan Sabha and Secretariat complex at Patna, valued
at Rs1,228mn and to be completed in 24 months. (BS) t
** Economic/Regulatory development
– RBI raised the limit on borrowings by banks under its repo facility by 0.5% of
their total deposits to offset heavy fund outflows expected due to payments
for 3G spectrum by auction winners and advance tax. (DNA)
