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Reports India

Indian stock market and companies daily report (December 30, 2013, Monday)

December 30, 2013, Monday, 04:43 GMT | 23:43 EST | 09:13 IST | 11:43 SGT
Contributed by Angel Broking

Indian markets are expected to open flat to positive tracking marginally positive opening trades in SGX Nifty and most of the Asian markets. SGX Nifty is trading higher by 15 points (0.2%).

US markets lacked direction throughout the trading session on Friday and ended modestly lower. The choppy trading seen for most of the day came as many traders remained away from the markets following the Christmas Day holiday on Wednesday. A lack of major US economic data also kept some traders on the sidelines following the recent string of upbeat economic reports. European markets ended on a positive note tracking gains in Asia, though the trading action was light throughout the day and is likely to remain subdued going into the next week, due to the upcoming New Year holiday.

Meanwhile, Indian markets rose for a second consecutive session on Friday, with firm global cues and continued buying by foreign funds underpinning sentiment. The trading during the week could be impacted by the release of reports on US consumer confidence, US manufacturing activity, and US construction spending, although traders may remain on the sidelines amid the New Year's Day holiday.

Markets Today

The trend deciding level for the day is 21,181 / 6,309 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 21,248 - 21,303 / 6,329 - 6,345 levels. However, if NIFTY trades below 21,181 / 6,309 levels for the first half-an-hour of trade then it may correct up to 21,126 - 21,059 / 6,294 - 6,274 levels.

Congress-ruled states to tackle food inflation

Having fared poorly in the assembly elections in Delhi, Rajasthan, Madhya Pradesh and Chhattisgarh, the ruling party is taking measures to tackle issues such as price rise and corruption. On Friday, the Congress Vice-President Rahul Gandhi prescribed policy action such as delisting fruits and vegetables from the APMC Act and strong crackdown on hoarders. To combat the rise in prices of fruits and vegetables the Congress-ruled states are seeking to do away with middlemen by removal of fruits and vegetables from the purview of their respective Agricultural Produce Markets Committee (APMC) Acts. This delisting is expected to happen in the 12 Congress-ruled states by mid January 2014.

The removal of these items is likely to benefit the farmers as they can directly sell their produce and at the same time it is likely to bring retail prices lower for end-consumers given the large mark-ups in wholesale and retail prices. The step is likely to contain manipulations in the price of these items which have contributed substantially to the overall headline inflation over the past 4-5 months.

The headline WPI inflation has picked up to 7.5% in November 2013 as compared to 7.0% in the three preceding months driven mainly on account of elevated vegetable prices. WPI food inflation touched about 20% as compared to 18.2% in October 2013 as vegetable prices continued to surge for the fifth consecutive month. Retail CPI inflation has also paced higher to 11.2% during November 2013 as against 10.2% in October 2013 as the food basket comprises almost 50% of the weightage of the entire index. Already, we are witnessing easing of unusually high prices in the case of onions for instance. If implemented in a time-bound fashion, the step taken could help to bring down food prices further in these states.

Sesa Sterlite commence mining in Karnataka

Media reports suggest that Sesa Sterlite has commenced iron ore mining in Karnataka. It has a permission to produce 2.29mn tonnes of iron ore per year in Karnataka. During 2011, Supreme Court had imposed a blanket ban in Karnataka. The commencement of operations in Karnataka has been slower than expected. The commencement of iron ore mining in Karnataka is unlikely to have a meaningful impact on the company's financials as it generates significant portion of its profits from Zinc and Oil and Gas business. Hence, we maintain our estimates and our Neutral rating in the stock.

Economic and Political News

- High-level panel approves Rs.17,630cr port projects

- More than half of rural households get no potable water at home: NSSO

- Coal Ministry identifies 4 mines for tariff-based bidding

- Engineering exports to US dips 10% between April-November 2013: EEPC

Corporate News

- Steel companies set to raise product prices on increased input costs

- CCI okays United Spirits deal to sell Tamil Nadu distillery

- MOIL production dips 2.4% during April-November 201 3

- Kanakia Group to invest Rs.500cr in residential, hotel properties

- Gabriel India sets up R&D centre for two-wheelers