Stock Market Updates For February 24, 2014

Advertisement

Corporate News/Results Corner

CERC order likely to provide some relief to Tata power and Adani power; Positive in short to medium term for Tata Power and AdaniPower.

Central Electricity Regulatory Commission (CERC) has allowed higher tariff as well as compensation of ~Rs 3.3bn for Tata Power’s 4,000-MWMundra project in Gujarat and also a compensatory tariff of 0.524 per KWH for the project from the period beyond April 1,2013 which will have to beborne by 5 states -Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.
The CERC has also granted a ~Rs 8.3bn compensation for Adani Power’s 4,620 MW Mundra plant in Gujarat. The amount is to make up for thelosses incurred by the Adani project due to higher cost of imported Indonesian coal. Gujarat has to pay ~Rs 4.2bn while Haryana have to shell out~Rs 4.1bn as compensation from the commissioning date till March 31, 2013 for the Adani power project. We believe this ruling to be favorable forTata Power and Adani power in the short to medium term.

Economic and Other News

Government to boost commodity exports to meet target

The government will push commodities exports that can be scaledup quickly to meet the export target for the year that will otherwisefall short second year running. On a cumulative basis, exportstouched $257 billion, recording a 5.7% growth against last yearbetween April and January and will need to expand by about 13% inthe remaining two months to achieve the targeted $325 billion lastyear. “Achieving the export target for the next two months definitelyseems challenging. We are holding meetings with various exportpromotion councils on how to push shipments in the next fewweeks,” said a commerce department official, without quoting alikely shortfall figure.

World News

Disappointing Home Sales Report Continues String of WeakHousing Data
Providing further evidence of weakness in the housing market, industrystatistics indicated a sharper-than-expected slide in home sales inJanuary. Severe winter weather cut into sales, but the market alsosuffered from longer-term headwinds. Home buyers were constrainedby tight credit, limited inventory, higher prices and higher mortgageinterest rates. The disappointing home sales report is part of a string ofdisappointing housing data that have come out lately. Cumulatively,these releases have pointed to a slowdown in this key part of theeconomy.

Global Economy Facing Slow Growth, High Unemployment:OECD
Comprehensive structural reforms are required to bring the global economy back to sustainable growth and to reduce unemployment, areport released by the OECD showed. In its latest “Going For Growth”study, the OECD encouraged governments to take action to boostproductivity, enhance growth and strengthen their respective labormarkets. Though signs of a broad-based global recovery are becomingmore tangible, advanced and emerging economies now face the risk offalling into a low-growth trap, the report said.

Many advanced economies need further reforms to tackle slowingproductivity growth and persistently high unemployment. At the sametime, tightening monetary policy and cooling of the commodity boomare posing challenges to many emerging market economies, where
comprehensive structural reform agendas are yet to be launched.OECD observed that the intensity of reform has remained highest insouthern euro area countries like Greece, Italy, Portugal and Spain,which are suffering from high long-term unemployment and youth
joblessness.

Market Trend

NIFTY – CMP 6155
Synopsis
Nifty opened with a positive bias & traded in a tight range forthe 1st half, buying on dips was witnessed leading the Index tofinally close 1% positive.
Going forward, 6132 is an important support which if held, canlead to a further short covering upmove till 6210.
Only on a break of 6132 & sustaining below it, support zone of6060-6070 would be retested.
Daily Momentum is in positive territory while Weeklymomentum is in negative indicating choppy price action athigher levels.

Bank Nifty – CMP – 10554

Synopsis
Bank Nifty opened with a positive bias & traded in a tight rangefor the 1st half, buying on dips was witnessed leading the Indexto finally close 1.2% positive.
Going forward, 10490 is an important support which if held,can lead to a further short covering upmove till 10720.
Only on a break of 10490 & sustaining below it, support zoneof 10200-10140 would be retested.
Daily Momentum is in positive territory while Weeklymomentum is in negative indicating choppy price action athigher levels.

Related Articles:

StriveBlue Home|Poompugar Shoppings